DEFINITION of 'Telephone Bond'

Bonds issued by telephone companies, or obligations of issuers who operate in the telecommunications sector. Once viewed as the quintessential safe investment, the appeal of telephone bonds has diminished in recent decades with the advent of deregulation and intense competition.

BREAKING DOWN 'Telephone Bond'

Telephone bonds have been in existence since the first decade of the 20th century. Telephone companies in the past derived their revenues through traditional phone services such as landlines and long-distance charges. However, they now garner an increasing proportion of their revenues from services such as wireless, internet access and data transfer, making their cash flows less predictable than in the past. This decrease in cash flow stability, coupled with the bankruptcy of companies such as WorldCom , has reduced the appeal of telephone bonds to some extent.

RELATED TERMS
  1. Federal Telephone Excise Tax

    The federal telephone excise tax is a statutory federal tax on ...
  2. Bond Market

    The bond market is the environment in which the issuance and ...
  3. Dollar Bond

    A dollar bond is a U.S. denominated bond that trades outside ...
  4. Double Barreled

    A double barreled bond is a municipal bond in which the interest ...
  5. Bond Buyer 20

    Bond Buyer 20 is a representation of municipal bond trends based ...
  6. Term Bond

    Term bonds mature on a specific date in the future and the bond ...
Related Articles
  1. Investing

    Corporate Bond Basics: Learn to Invest

    Understand the basics of corporate bonds to increase your chances of positive returns.
  2. Investing

    Why Bond Prices Fall When Interest Rates Rise

    Never invest in something you don’t understand. Bonds are no exception.
  3. Retirement

    Should I Invest in Bonds After I Retire?

    Yes, retirees should invest in bonds, but remember that not all bonds are safe investments. Seek the help of a financial advisor.
  4. Investing

    How Interest Rates Impact Bond Values

    The relationship between interest rates and bond prices can seem complicated. Here's how it works.
  5. Investing

    U.S. Corporate Bonds: The Last Safe Place to Make Money

    There aren't many other sources right now for relatively safe, steady income.
  6. Investing

    Six biggest bond risks

    Bonds can be a great tool to generate income, but investors need to be aware of the pitfalls and risks of holding corporate and/or government securities.
  7. Investing

    The Basics Of Bonds

    Bonds play an important part in your portfolio as you age; learning about them makes good financial sense.
  8. Investing

    The Basics Of Municipal Bonds

    Investing in municipal bonds may offer a tax-free income stream, but such bonds are not without risks. Check out types of bonds and the risk factors of muni-bond.
  9. Investing

    Corporate Bonds: Advantages and Disadvantages

    Corporate bonds can provide compelling returns, even in low-yield environments. But they are not without risk.
  10. Investing

    5 Reasons to Invest in Municipal Bonds When the Fed Hikes Rates

    Discover five reasons why investing in municipal bonds after the Fed hikes interest rates, and not before, can be a great way to boost investment income.
RELATED FAQS
  1. What determines bond prices on the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market and why bond prices and yields ... Read Answer >>
Hot Definitions
  1. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  2. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  3. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  4. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
  5. Internal Rate of Return - IRR

    Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments.
  6. Limit Order

    An order placed with a brokerage to buy or sell a set number of shares at a specified price or better.
Trading Center