Smartphones have become a necessity, and that's good news for telecom giants AT&T and Verizon. For the most part, a tough economy isn't going to cause many people to drop their wireless plans. However, these companies are still exposed to customers downgrading plans, delaying smartphone upgrades, and being generally more cautious with spending. AT&T, for example, had to cut its free cash flow guidance earlier this year largely because customers started delaying payments.

If you're a risk-averse dividend investor who wants to cut your exposure to the state of the economy, the telecom giants may not be the best choice. They're more recession resistant than most companies, but their performance is still dependent on consumer spending. A better choice is American Tower (NYSE: AMT), which just hiked its quarterly dividend by 6.1%.

Telecom companies that operate vast wireless networks need to put their equipment somewhere. Outside dense cities, that equipment generally goes on wireless towers.

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Source Fool.com