It's 2008!

Happy New Year Everyone!

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Florida Public Service Commission Issues Consumer Warning on Prepaid Phone Cards

In another move against the prepaid phone card business, the Florida Public Service Commission issued a consumer warning on phone cards. The report urges buyers to beware of many prepaid phone cards which have been found to be misleading consumers and acting in ways against that of Florida public statures. These problems include:

- Some of the phone cards didn't work at all
- Some of the phone card companies were not registered with the Public Service Commission as required
- Extra unadvertised surcharges and card limitations were not always disclosed
- Access numbers for some cards' networks were continuously busy
- Some phone cards advertised no connection fees, yet charged disconnection fees, misleading consumers
- Advertised per-minute rate on some cards applied only one call. Additional calls were charged at a significantly higher rate. Also, advertised rates, in some cases, applied only to limited areas, which was not disclosed

Florida has become one of the most active states in the battle against prepaid phone cards and their questionable practices (following the Florida Attorney General warning earlier this year).

See the full article here at Florida Today

Phone Card Commercial - Week 25

A very strange but clever phone card commercial from argentina for a phone card by Convergia.

MySpace and Skype Partner

In one of the more common sense deals in the telecommunications industry, Skype has agreed to partner with MySpace to empower their huge social community to make voice calls. MySpace will be introducing a new IM client that will also have the Skype engine built in. The service has been launched in beta and should be available to the masses in early 2008.

A great move for Skype as it will allow them to tap into a new market of social community users, mostly here in the US , an area where they are extremely weak. For those of us in prepaid, we really don't have much to worry about as this youth market was not big on prepaid calling cards in the first place, so our markets should not be eroded any further by this deal. It may have a small effect on prepaid mobile consumption but I don't think anything of note... young people just love to talk on the phone anyways so I think they will just end up talking more!

Canadian Prepaid Wireless Market

Not to leave our friends north of the border out I decided to write this next post on the Canadian prepaid wireless industry.

Prepaid Mobile Demographics in Canada:

• Total mobile phone subscribers = 17 million
• Percentage that are prepaid subsribers = 29% (double that of the US market at 15%)
• Prepaid mobile growth = the market saw it's largest growth in the early half of the decade with double digit percentages in 2003 and 2004
• Future prepaid mobile growth = The market has reached it's peak and growth is small (less than 1% growth per year) where as the US market has larger growth forecasts.
• Prepaid mobile has a 15% penetration in the total population
• Prepaid mobile brings in roughly 421 million per year in Canada

Provider Market Share:

• Rogers Wireless has 39% of the prepaid market in Canada
• Bell Wireless Alliance holds 36% of the prepaid market
• Teleus Mobility has 22% of the prepaid market
• Aliant Mobility has 2% of the market

Conclusion:

The prepaid market in Canada has matured and peaked at a much faster rate in Canada than in the US and growth, while small, is still going to be happening well into the next decade. Canadians have embraced prepaid more than the US market due to their lower average incomes and necessary expenditure controls.

Statistics are courtesy of http://www.sfu.ca/cprost/prepaid/early.htm

International Calling Destinations on US Phone Cards

While not the most up to date information (the numbers are from 2004), the following data still remains fairly indicative of the current market:

Breakdown by Continent:

• North and Central America = 30% (this has no doubt decreased since 04)
• South America = 19% (this has no doubt increased since 04)
• Western Europe = 13%
• Asia = 10%
• Eastern Europe = 7%
• Caribbean = 6%
• Africa = 6%
• Other = 9%

Breakdown Of Minutes Made Using US Calling Cards by Country:

• Mexico 2,033.3 million minutes
• Canada 948.9 million minutes
• Columbia 801.3 million minutes
• Brazil 629.6 million minutes
• UK 489.5 million minutes
• Dominican Republic 489.0 million minutes
• El Salvador 406.7 million minutes
• Guatemala 361.5 million minutes
• India 331.4 million minutes
• Germany 293.7 million minutes

Phone Card Commercial - Week 24

Commercial in Spanish for an IDT Phone Card.

Virgin Mobile USA Faces Class Action Lawsuit

Having just gone public in October of this year, Virgin Mobile USA now faces a class action lawsuit from many of it's shareholders who are extremely disappointed with the poor performance of the stock. The lawsuit alleges that Virgin Mobile USA withheld many actual losses prior to it's IPO and as a result mislead investors into believing the stock was worth more than it actually should have been.

The stock, when first made public in October, was trading at around $15 and now less than two months later it is trading at almost half of it's original value, last trading at $7.28.

Unfortunately this seems to be a trend with many telecommunications companies in recent years, going out high and quickly falling. Vonage went through the same trend when it came out last year. Hopefully this is not an omen for the industry as a whole!