Vonage... Please Just Go Away!

Last week Vonage managed to get a stay on the order requiring them to stop signing up new customers until their appeal is heard and Vonage, fearing for it's life, has started a campaign called "Free to Compete" (http://www.freetocompete.com/) that is urging it's customers and supporters to fight the "wrongful" tactic of Verizon to shut them down. The claim, in short, is that Verizon doesn't like Vonage because they are offering competitive rates which lure their customers away and that Verizon likes to rip people off...

While I do like lower prices, I have to admit that Vonage's long term plan on making money is non existent and even without the lawsuit, I think Vonage would have been out of business within 5 years anyways. Their cost per acquisition is just way too high and they are not physically responsible for paying for the wires that supply our homes with Telephone and Internet, both services that Vonage could not exist without.

Your Cable provider and Verizon, have to charge higher rates because they are responsible for providing and maintaining these wires into your neighbourhoods and houses. It is for this reason why you have to pay more... Verizon has to pay for the infrastructure and they don't charge the higher rates because they want to be greedy pigs but because they have to!

There is no doubt that Verizon maybe a little greedier than they should be and that competition will benefit the end user, I just don't feel like Vonage's business model and pricing should be allowed considering all of the issues above.

Intelecard Expo in Miami Wraps Up!

Well, another Miami InteleCard show is now over and while the show is now more about other solutions than prepaid phone cards, it still attracts a lot of exhibitors and attendees. The show floor was packed with people both days and of course there were the traditional fights breaking out here and there (two guys almost took out the bar at the CVT booth).

CVT had a nice booth and UTA, the last minute exhibitor (they must have gotten a good price), also had a decent looking booth. But I think the best part about the show was that it allowed all of us to get together with our peers and discuss business and new opportunities. I had a good time meeting with some of the prepaid wireless and cash card companies who have opened up some interesting possibilities for my business.

Having been on both sides, a few times as an exhibitor and the last few times as an attendee, I have to say that NOT exhibiting allowed me to get more business done than with a booth. The booth is just too restrictive, allowing me to only meet with people who come my way... and lets be honest, most of the time you have to chase down people to get the business relationships you really want!

I didn't manage to get to the party but overall I have to say that InteleCard did a nice job with this show and I look forward to the Vegas show later in the year... Just one parting comment... how come InteleCard manages to still have success with the trade shows but their magazine is tanking big time?

At&t CEO Retires and Cashes In Big Time!

On Friday it was announced that at&t chairman and chief executive officer, Edward Whitacre is retiring (65 years old) and as a parting gift he will be getting a 158.5 million payout. And you thought telling your kids to become a doctor or a lawyer was the best way for them to make big money.

Being an executive of a large corporation is quickly becoming the fastest way to becoming a billionaire these days.... Believe it or not this was not the largest payout to a Chief Executive Office, that honor is held by former ExxonMobile CEO Lee Raymond, who received a 351 million parting gift back in 2005. In fact this was only the thrid largest parting gift, behind a former Wall Street Executive Richard Handler who received a measly 202 million parting prize.

Whitacre has been a long time CEO (17 years) with SBC and now at&t and no doubt moved this company into a position of dominance, but I don't think anyone deserves to get a 158 million dollar package on their way out. With so many employees in Telecom loosing their jobs, all SBC has done, is manage to squash the competition and reduce the market place.

I am just sick of this corporate greed.... no corporate executive deserves to make this kind of money and especially not when they are on their way out the door!

Phone Card Commercial - Week3 - Viva Mexico

The commercial is a low budget one done for TV in the Huston area but I thought it was still very well done considering the low budget.

New Sponsor - PinlessWorld.com

Hi everyone, I am happy to announce that I just received a new sponsor Pinlessworld.com.

PinlessWorld provides prepaid phone cards, wireless refill products as well as ringtones. Please pay them a visit and see what they have to offer.

http://www.pinlessworld.com/

Sponsors like them help me keep providing all of you the up to date content and gossip from around the industry.

Best Selling Phone Cards - March 2007

As a new feature here on my blog, I will now be providing a top 10 list of phone card sales each month. The results are provided courtesy of phonecardmania.com and are not necessarily the best sellers overall, but due to the lack of overall sales tracking for the business, this should prove a good general guide for all in the phone card business.

Top 10 Sellers for March 2007

1) Boss NY (IDT)
2) Minute Wait
3) Star Call
4) I Connect
5) Rescue
6) Ho Chi Minh Tet
7) TCC Spirit
8) STI Free Mass
9) Boss Card LA (IDT)
10) Buena Vista

Tax Refunds for Phone Card Retailers

With tax time upon us, just wanted to make sure that those of you who have not yet filed, be sure to use the Federal Excise tax credit.

While every home user qualifies for a credit on their post paid telephone services, prepaid card Excise tax was always the responsibility of either the carrier or the retailer, so therefore they can qualify for a refund. As long as the phone card was not restricted to local-only service, the retailer or service privider is eligible to request the refund.

The government stopped the LD excise tax (3%) last August after a federal court decisions stated that the tax does not apply to long distance service anymore as it was dated. The IRS also authorized a one-time refund of the 3 percent federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006.

Businesses request the refund by filling out Form 8913, Credit for Federal Telephone Excise Tax Paid, and attaching it to their regular income-tax return. More information on the refund is available in the “Telephone Excise Tax Refund” section on the front page of IRS.gov.

Oblio Telecom

I always new about Oblio Telecom but I never new they were a sub company within a larger corporation called Titan Global Holdings, Inc.

From what I can see Titan owns Oblio as well as StarTalk, Titan Wireless Communications, Pinless, and a circuit board manufacturing company, Titan TCB, that does work for the Military. They claim to be the second largest publicly traded prepaid company behind IDT and from my estimation they are probably the second or third major player in the phone card market behind IDT and maybe STI.

Also of note, their mobile offering has service provided by Sprint.

I know this is not really news but I thought I would share this information as it does not seem to be common knowledge.

IDT Settles with Locus and Dollar Phone

Looks like IDT's big lawsuit drama is coming closer to resolution as two of the bigger players agreed to settle with IDT this week. Those two companies are Locus Telecommunications, Inc. and Dollar Phone Corp.

The terms of the settlement seem to be very simple... all parties agreed to provide the customers with the minutes advertised. No money was involved in this settlement.

Now the only hold outs are STI Phonecard, Inc., VOIP Enterprises Inc., Find & Focus Abilities Inc., and of course CVT Prepaid solutions Inc.

Phone Cards - A Little Bit of History

I always get asked the question, how long has the prepaid calling card business been around and who invented it so I thought I would give a brief history to help shed some light on this little known subject.

The first phone card was introduced in Italy in 1976 by a pay phone operator, SIDA, who created a mag stripe card to use in their phones instead of change. Pay phones were being broken open by thieves and the company needed to find a way to reduce this problem.

Phone cards floated around Europe for years but did not come to the United States until World Telecom Group introduced them in 1987. Distributed by GE and Siemens they were mag stripe cards and did not see much mass distribution. It was not until AT&T introduced their own calling card in 1989 that the product really started to hit the mainstream market.

A year later NY Bell released their own calling card that was the first of it's kind in the US where the user dialed an access number and entered the pin printed on the card (turned out to be the most popular form of calling card). Over the next few years all of the major telecom companies followed suit and released their own cards.

By 1993 the calling card market in the US was generating 25 million annually and most of the companies by this time had dropped the mag stripe technology and switched to the access number and pin format. Two years later (1995) the phone card business in the US had grown to a 650 million dollar business and by the close of 2000 it was around a 3 billion.

The end of the 90s brought about most of the smaller companies but with the decline in the domestic market brought about by the surge in the cellular phone business, many of these smaller companies could not survive and most were gone by 2003 and 2004.

The market continues today and while more ethnically focused than before continues to bring in billions of dollars a year.