JDS Uniphase (nasdaq: JDSU - news - people )is the dominant provider of optical networking components, and optical networks are the medium of choice today for most telecommunications services. JDS has been slow to return to profitability, which has disappointed investors, but it appears very well positioned for the future.
Lucent (nyse: LU - news - people ), which was originally the legendary Bell Labs equipment arm of AT&T before its breakup, is still the leading producer of equipment for many key applications. Moreover, it maintains a high level of research and development and should continue to bring out innovative new products. Lucent may never be a $60 stock in any of our lifetimes, but it could hit $10 in a few years.
Nortel Networks (nyse: NT - news - people )is one of the big boys in the sector, along with Alcatel and Lucent. A series of accounting problems has shaken investors' confidence, but those appear to be over and done with, and there is good upside potential in the stock.