Telephone Bond

Building a telecom company is expensive. There's a lot of equipment involved. In the old days, you had to string thousands of miles of phone lines. Nowadays, you have to build and maintain cell towers...and maybe more wires for that side cable business.

These companies need a lot of money. That's the point. (See: Capital Expenditure. See: WACC.) One way to raise that cash is to issue debt. The term "telephone bonds" is the nickname for the debt securities issued by telecom companies.

It may seem kind of silly that bonds issued by this specific industry get their own nickname. But the high levels of debt involved in building a telecom network make them frequent issuers of bonds.