Currently, the wireless segment of the Telecommunications Services Industry is transitioning from third- (3G) to fourth- (4G) generation technology. Lingering economic weakness, after the latest recession, is fueling intense competition among the wireless telcos and their equipment suppliers. Customers are benefiting by way of advanced mobile devices and services and improved pricing. Change increases uncertainty, an anathema to investors, but the transition presents some favorable investment opportunities.

Sprint Nextel (S) and Clearwire (CLWR), with its cable and high-tech partners, are spending billions on their rollout of 4G services, based on WiMax, an enhanced wireless fidelity platform. The Kansas-based telco is providing ample spectrum (i.e., capacity) and a broad cell-tower network to deliver the services. Clearwire, a Kirkland, Washington company, is implementing the rollout, aided by Intel (INTC), Google (GOOG), Time Warner Cable (TWC), BCE Inc. (BCE) and, among others, Motorola (MOT).

Verizon Wireless, a Verizon Communications (VZ)/Vodafone Group (VOD) partnership, is leading the introduction of another, capital-intensive, competing 4G offering, distributed via Long-Term Evolution (LTE) technology. It’s debatable as to which technology is superior, but LTE appears to have a larger global following. Both WiMax and LTE should have fairly wide coverage of the U.S. market by the end of next year. Small player MetroPCS (PCS), which offers low-cost, flat-rate unlimited service, has embraced LTE in hopes of gaining a competitive advantage.

Meanwhile, AT&T (T) is taking a more economical route. This company is upgrading its existing 3G network to provide “3.5G” services. The upgrade is a bridge to a likely eventual launch of 4G LTE, and quickly brings a very competitive offering to the marketplace. Leap Wireless (LEAP), another small player, is being even more cautious about introducing a pricey, nontraditional service, and has yet to commit to 4G.

The financially, well-heeled LTE backers have been more popular with investors, especially among the growth-and-income crowd, as evidenced by their good Stock Price Stability. Stocks of Sprint Nextel and Clearwire, however, have proven more volatile, due to the companies’ heavier debt leverage and past service miscues on the part of Sprint Nextel.

Aside from the telcos, there are other visible beneficiaries of the transition from 3G to 4G. Notwithstanding challenged consumer and corporate budgets, the popularity of increasingly versatile smartphones is growing. The telcos are seeing very high utilization of their wireless networks, and endeavoring to optimize capacity. Tower companies, such as American Tower (AMT), Crown Castle International (CCI) and SBA Communications (SBAC), are reporting strong demand for existing cell sites and lease amendments. They are adding more tenants per site and constructing and acquiring (from smaller entities) new towers. The tower operators are also heavily leveraged with debt, but as their revenues and cash flow expand, they are securing better borrowing terms. Venturesome growth investors may find the stocks of these networkers attractive. Manufacturers of mobile devices have gained from the 3G-to-4G transition, as well. The standouts are Apple (AAPL) and Research in Motion (RIMM); and HTC Corp., Samsung, Nokia (NOK), Palm (PALM) and Ericsson (ERIC) are not far behind.