Detroit Phone Cards Up for Sale!

Looks like Rami Chahine, President and Owner of Detroit Phone Cards may have a buyer lined up for his phone card distribution business. Pavis Corporation, a telecommunications carrier with a strong calling card business, has signed a letter of intent to purchase the company (read more about Pavis in Yahoo Finance). From the press release it says that Detroit Phone Cards has 24 million in annual phone card sales and another 6 million in prepaid mobile sales. The claim is that the acquisition will help Pavis strengthen their calling card and prepaid wireless business but I can't help but wonder if this does not have shades of the Clifton Digital acquisition by Telstar International from years back.

In my mind there are only two reasons that a phone card distributor would be bought; Because they owe a carrier lots of money and the carrier can't afford to let the distributor die and risk not getting anything back (i.e. Clifton Digital/Telstar deal) or the carrier wants to secure a distributor and try to copy the successful IDT/UTA model (Epana/Hector tried this a while back).

Either way this is a significant happening in what has been a relatively quite couple of months in the prepaid world. Detroit Phone Cards has been around for a while and in this business that says a lot. I wish them luck with the endevor!