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. Mail Or Telephone Order Merchandise ...

    A regulation that controls businesses that sell products over ...
  2. Bond Broker

    A broker who executes over-the-counter bond trades between institutional ...
  3. Bond Fund

    A bond fund is a fund invested primarily in bonds and other debt ...
  4. Combination Bond

    A bond, typically a municipal bond, that has financial backing ...
  5. Serial Bond

    A bond issue in which a portion of the outstanding bonds matures ...
  6. Bond Purchase Agreement

    A legally binding document between a bond issuer and an underwriter ...
Related Articles
  1. 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.
  2. Investing

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  3. 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.
  4. Investing

    Six biggest bond risks

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

    The Basics Of Bonds

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

    Bond Funds Boost Income, Reduce Risk

    Bond funds can provide stable returns for those who depend on their investment income.
  7. Investing

    How Bonds Are Vital to a Successful Portfolio

    While bonds are a vital part of an investment portfolio, they are often ignored.
  8. Trading

    Will VoIP Kill Traditional Telephony?

    VoIP phone service is gradually taking over market share from traditional telephones, but it has not yet entirely replaced landlines.
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 >>
  2. Has deregulation helped or hurt the profitability of companies in the telecommunications ...

    Read about the impact of deregulation on the U.S. telecommunications sector, particularly with regards to the profits of ... Read Answer >>
Hot Definitions
  1. Intrinsic Value

    Intrinsic value is the actual value of a company or an asset based on an underlying perception of its true value including ...
  2. Bubble

    1. An economic cycle characterized by rapid expansion followed by a contraction. 2. A surge in equity prices, often more ...
  3. Swap

    A swap is a derivative contract through which two parties exchange financial instruments, such as interest rates, commodities, ...
  4. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  5. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  6. Risk Tolerance

    The degree of variability in investment returns that an individual is willing to withstand. Risk tolerance is an important ...
Trading Center