Ahead of the release of quarterly numbers by telecom services companies, Morgan Stanley said it remains cautious of the sector, blaming the caution on secular growth trends, intense competition and regulatory risk.Macro And Micro ConditionsThe firm noted that the sector benefited from macroeconomic conditions, as lower interest rates drove traders in droves to defensive stocks. Additionally, the USD strength is also supporting the space. These duo of factors, according to Morgan Stanley, has led to outperformance of telecom services stocks in the year-to-date period.However, on the micro level, Morgan Stanley sees risks of slow growth, competitive pressure and regulatory uncertainty. The firm expects in-line results from these companies due to the EIP adoption benefiting wireless margins. Morgan Stanley also expects low upgrade rates ahead of an iPhone refresh.The Sector As A WholeThe firm also said it is keeping a tab on the regulatory calendar, given that the 600 Mhz auction proceeds to the next stage and the FCC's stance on Special Access, Set Top Box reform, privacy and net neutrality. The brokerage added that it is paying close attention to the U.S. presidential elections, which will determine the fiscal and regulatory programs of the next administration. The company also sees burgeoning promotional activity ahead of the back to school season.Specific NamesWhile remaining overweight on telecom infrastructure stocks, including the three tower companies, namely American Tower Corp ,Crown Castle International Corp and SBA Communications Corporation NASDAQSBAC; fiber providers Level 3 Communications, Inc. NYSELVLT and Zayo Group Holdings IncNYSEZAYO; CyrusOne Inc and Communications Sales & Leasing Inc , Morgan Stanley also recommends Verizon Communications Inc. and AT&T Inc. among large carriers.Citing concerns about broadband competition and the need for higher capital expenditure, Morgan Stanley said it is turning more negative on RLEC companies. Specifically, the brokerage downgraded Frontier Communications Corp NASDAQFTR and Centurylink Inc NYSECTL.Earnings ReleasesEarnings dates of telecom services Ccmpanies in Morgan Stanley's coverage universe:Positive American Tower: July 28, before marketSBA Communications: July 29, after marketZayo: Mid-SeptemberCyrusOne: August 1, before marketNegative Frontier Communications: August 1, after marketRaxspace Hosting, Inc. NYSERAX: August 8, after market