What is the Future of Prepaid Phone Cards?

While most of us will no doubt agree the prepaid phone card boom is well behind us, but the real question now is what kind of future does the prepaid card business hold?

The answer, seems to be clear by the fact that the once powerful companies, like UTA and STI are just not doing well. Sales of prepaid cards are at an all time low and I think the market was just so badly managed and abused that the customers are more willing to try other methods of long distance calling, like with prepaid cellular phone, VOIP services (Skype/Vonage) as well as traditional long distance.

The idea that the average prepaid phone card customer is credit challenged and prefers cash business is changing and more and more immigrants are either becoming more credit enabled or now have the means, through prepaid cash cards and other debit systems, to buy more mainstream services.

Immigrant consumers are more educated and technology savvy than they were 5 years ago and the rates that Ma Bell and VOIP players are offering today are so low that it is almost no wonder why a lot of people are turning away from phone cards.

What do you think?

CVT Kicks the Battle with IDT up a Notch!

This story just keeps going!

In an effort to get the most mileage from the IDT lawsuit against the prepaid industry, CVT Prepaid Solutions has just taken grand standing to a whole new level.

They had subpoenas issued for IDT chairman, Howard Jonas, and UTA CEO Carlos Gomez. CVTs goal is to prove that IDT has engaged, and continues to engage in the unfair practices that they are are claiming everyone else is doing.

In my opinion the whole lawsuit is just a joke and CVT is using this joke to gain a lot of PR and name recognition. Everyone knows that none of IDTs claims would stand up in court and if you ask me, the only thing that could come of this is collusion, which last time I checked is not allowed in the business world.

I am sure this drama will continue, with each making full use of their soapbox!

IDT and EPANA Reach Settlement

In a update to an earlier posting, EPANA, one of the companies named in IDTs lawsuit against the whole prepaid industry, has settled with IDT and has agreed to join forces in helping clean up the prepaid calling card business.

To read all of the details about the settlement go to: http://www.tmcnet.com/usubmit/2007/03/20/2431901.htm

On the other extreme, CVT Prepaid Solutions is standing firm agianst this lawsuit and claiming that they do not engage in such practices and have nothing to hide.

http://biz.yahoo.com/prnews/070319/nym119.html?.v=59

OK so two have made there stance clear and now we have to wait to see about all of the rest of the named parties.

This is turning out to be the most action we have seen in the prepaid calling card business in years!

IDT and Union Telecard Alliance Sue Everyone who is Someone in the Prepaid Calling Card Business

I was shocked when I saw the news on Business Week that IDT and Union Telecard Alliance (their calling card distribution arm) had filed a civil anti-fraud lawsuit against much of what's left of the prepaid industry. The suit claims that various companies have been engaged in deceptive rating practices that prey on consumers to fool them into thinking their products are better and giving an unfair market advantage.

The companies who received the honor include:

1. CVT Prepaid Solutions, Inc.
2. Dollar Phone Corp. (Dollar Phone Services, Inc., Dollar Phone Enterprises, Inc., Dollar Phone Access, Inc.) - this Dollar Phone Guy has a lot of companies!
3. Epana Networks, Inc.
4. Locus Telecommunications, Inc.
5. Total Call International, Inc.
6. STi Phonecard, Inc.
7. Find & Focus Abilities, Inc - Never heard of these guys!
8. VOIP Enterprises, Inc.
9. Telco Group, Inc.

I imagine that it's not just coincidence that the timing of this suit happened to coincide with their Q2 financial results announcement showing that their calling card sales were slumping.

Hey if you can't beat em sue em!

The business does need to be cleaned up, it's just very odd to see it trying to be done this way. It will be interesting to see how this plays out.

BaTelCo Cracks Down on Retailers Selling Phone Cards Below Cost

In America, we are all used to seeing phone cards being sold at below face value and is generally an accepted practice in the service providers eyes but it Looks like in the Bahamas the main service provider is not going to allow this practice.

The Bahamas Telecommunications Company (BaTelCo) has just started a big crack down on retailers selling their $20 cards for below cost (sometimes $19 or even $18). The reason, at least their reason, is that they want to provide a level playing field for all distributors and retailers so that all make the margins they should.

Definitely not a free market economy business practice and in the end the consumer just ends up being the only one who loses.

You can read more about this story at http://freeport.nassauguardian.net/national_local/333690256373958.php

Around The Web - Prepaid Telecom Sites

Being that prepaid telecom is such a niche subject I thought I would help everyone out by sharing some of the web sites I know that deal with the subject:

www.intelecardnews.com - Print and Web publication about the prepaid calling card, mobile and debit industry

www.phoneplusmag.com - Print and Web publication about with regular coverage on everything relating to telecom, including prepaid products

www.prepaid-press.com - Web site with news and information about anything prepaid

www.drprepaid.com - A nice site with news and info on the prepaid mobile buisness

www.cardweb.com - Web site and print publication on the prepaid debit and credit card industry

http://www.prepaidgrapevine.com/ - Prepaid mobile and calling card forum

If anyone knows of any other sites relating to prepaid business please feel free to post a reply to this post.