Canadian Prepaid Calling Card Market

In this article, the third in a long series of articles on the prepaid calling card market, I will provide a quick overview on the Canadian prepaid market and where it is heading.

While those of us in the US had seen the huge boom in the phone card market back in the late 90s, Canada was a little bit further behind in it's market maturity. It was not until the early part of this decade that they began their boom. However the boom was very short lived and the market decline began just after the Canadian market hit it's peak in 2004 (320 million in revenues). The quick decline came about mainly as a result of the emergence in the popularity and acceptance of the prepaid mobile market, which took off much faster than in did in the US.

Since 2004 each year has seen a steady decline in revenues, shrinking to around 310 million in 2005, and currently sits around the 280 million mark. The trend looks like it will continue to decline at a pace of around 20 million a year until well into the next decade.

While the Canadian market appears to be maturing much faster, it is also an extremely different marketplace. Immigrants to Canada are not as credit challenged as they are here in the US and their acceptance of new technologies is much greater than it is here. The mobile phone market appears to be taking over at a much faster rate in Canada with a remarkably bigger chunk of the cell phone market going for prepaid over post paid services. Other services like Skype and Vonage are also eating away at the phone card market with their cheaper and more technologically savvy product offerings.

In short the reality is that the immigrant market, long seen as the primary consumer for phone cards, is much more sophisticated and slightly more well off than the US immigrant market. Immigrants to Canada on average have much greater incomes than their US counterparts.