Explanation/Reference:
Telnet, by default, does not encrypt any data sent over the connection (including passwords), and so it is often practical to eavesdrop on the communications and use the password later for malicious purposes; anybody who has access to a router, switch, hub or gateway located on the network between the two hosts where Telnet is being used can intercept the packets passing by and obtain login, password and whatever else is typed with a packet analyzer.