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What: Hey, telecom service and equipment providers... nobody likes you! That's the reverberating sentiment on this notably strong up day for the market as service providers Leap Wireless
So what: For Inteliquent, which missed EPS estimates by $0.07 and guided full-year sales well below Wall Street's forecasts, it blamed slowing sales from telecom companies. Leap Wireless, which operates the Cricket service and is the sixth-largest wireless provider in the nation, reported a nearly 290,000 drop in subscribers as promotional efforts failed miserably. NII Holdings, which provides wireless services in Central and South America, slashed its full-year forecast as unfavorable currency translations, lower average revenue per user, and higher costs associated with its 3G network rollout are crushing its bottom line.
Now what: Yuck... E.T., the telecom industry needs you! Really, what the telecom industry needs is for big telecoms Verizon and AT&T
Personally, I'm one of the few people that is intrigued by the attractive valuations in the telecom sector, but I much prefer equipment providers than service providers. Inteliquent is once again looking attractive, while Leap and NII Holdings deserve to be wrapped up in layers of yellow caution tape.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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