Media Attention Towards Shady Minute Calling Card Industry Continues

With each new day comes more media attention towards the crooked practices in the calling card industry. In the last month alone I have seen dozens of articles from major publications focusing on this topic:

USA Today - Shortchanging phone cards probed

Los Angeles Time - Watching for scams on prepaid calling cards

Orlando Sentenial - Users may come up short with low-cost phone calling cards

Columbus Dispatch - FTC cracks down on misleading phone cards

Arizona Star - Prepaid-phone-card-fraud is rampant

and many more!

What surprises me is that it hasn't seemed to change the way the phone card operators are doing business! You would think that with this press coverage and the IDT lawsuit, this business would take a stand and finally clean itself up for good! However, most of these guys seem to be stuck in a time warp and keep conducting business like it was 1999! The winner in this game is going to be the company that puts it's money where it's mouth is and cleans up their cards and conducts a strong marketing push to educate the consumers that their product is clean and delivers the minutes and quality advertised.

The market is shrinking and it is going to take some smart, consumer friendly company to come out of the mold and take a stand!

Commercial IDT La Leyenda Phone Card

This is a good Spanish language commercial for the IDT LA Leyenda phone card. A little higher production value than most of the other prepaid phone card commercials.

Spring 2008 Intelecard Expo - Post Show Review!

Ok so the Intelecard Expo in Edison NJ has just about wrapped up and I have to say this was probably one of the worst prepaid shows I have ever gone to in my life! For starters the show was way off the beaten path in the middle of an industrial park.... I got lost trying to find this place! Once I finally did get there it got a whole lot worse.

I didn't see too many cars in the parking lot, which should have tipped me off, but when I got in I think there was about 50 people there at the maximum and the show had already been open for an hour. Most of those 50 people were booth staffers and they were just going back an forth talking to each other. What made matters worse was the show looked like it was done in a garage. There was no carpeting in the iles and the were only 27 booths scattered over 4 rows. I have seen Church Bazaars bigger than this thing! I felt so bad for the Intelecard show staffers and the booth staffers, they looked bored out of their minds! I went and talked to a few of them just to help them pass the time (I posted a picture here to the left of the outside of the NJ convention center where this show was held).

CTA and Simple2Call had the biggest booths (20 x 30) and Raza had a fairly big booth (10 x 20) right at the entrance. Other booths there at the show included ones from Cell Gate USA, Direct Wholesale, Emida, Futura Card Services, NACT, Nexus Wireless, N-Soft, Pulsar Communications Inc., SK3, STX Communications LLC, Telispire, Via One Technologies Inc, WCGS and a few others. If you ask me these companies should ask for some money back! No real big providers were exhibiting there but Ibasis had there very own meeting room and seemed to be making the most of the show and I also saw a few IDT and Locus guys roaming around. I hope it was a little more well attended on the first day of the show than it was on the second (The picture to the right here is as you walk into the hall and the Raza booth is straight ahead).

It saddens me to see Intelecard this way and I hate to say this is probably one of their last shows judging based on this poor performance. It's not all there fault, the industry has shrunk big time and to top it off they now have competition from the Prepaid Press. I think the lesson learned here is there is only room in today's market for one show a year and I think that honor is going to now be owned by the Prepaid Press Expo in Vegas.

Well that's it for my review of the show and farewell from beautiful Edison NJ!

New Jersey Spring Intelecard Expo 2008 Begins

Well today marks the first day of the very first Intelecard expo ever in Edison New Jersey! Today is just for registration and some conference sessions but on Wednesday the exhibit hall opens and the fun will start. I know I have been making fun of the Intelecard expo a lot lately but in reality I look forward to the opportunity to get together with other industry folks and catch up. It's also a great time to get some one on one time with some key players and get some good traction going on future business ventures. It can take weeks if not months to get a deal going over the phone and email but in person we can often get things done in one or two sittings!

I won't be there at the expo myself until Thursday and I will be sure to report back for those of you that won't be able to make it. Maybe I will even include some pictures :)

Look forward to seeing you all there!

The Ludicrous Executive Payouts Continue at IDT

For a company that is just bleeding money, IDT sure does like to keep those big pay days going for senior management. In a disclosure notice today, IDT announced that they had given CEO Jim Courter a cash bonus of $372,000 and 93,234 shares of restricted stock (valued at $372,000). They also gave the Telecom Chief Operating Officer Yona Katz a contract extension until September of 2008 in which he will be paid $125,000 a MONTH with a bonus to be awarded in July for $155,280. Katz also has a clause in his contract which states should he be terminated between now December 2009 he is entitled to a severance payout of $2,177,023.

So if you get your calculators out, and you better have one that can sum up that high, IDT has just committed to paying out more than 1.5 million dollars this year to two people! This is just plain obscene! Are 2 people who have been running a sinking ship really worth that much money? If the company was doing well, I would think that this amount is fine, but for a company who has been nose diving quarter after quarter, this is just plain wrong!

Oh yeah I forgot to mention that they paid out some smaller bonuses as well to some of those other exec's! You can read the whole sickening report at this link!

Blackstone to Distribute Best Mexico Phone Cards

Viscom International Inc. has been pushing the Best Mexico card series a lot lately and this week just announced that they have agreed to a deal with Blackstone Calling Cards to distribute this growing brand through the 5,000+ Touch-n-Buy terminals throughout the US.

Blackstone's Touch-n-Buy terminals are touch screen terminals that sit on a counter top and allow consumers to select from over 100 different prepaid phone cards, cash cards and mobile cards. Once the customer chooses the product they want their pin number is printed out by the cashier and payment is made.

Viscom, founded in 2001 has been gaining some traction lately with the Hispanic market and has been advertising their product very heavily, especially in the South East. On their website http://www.viscominternational.com/ they claim to have processed to date over 130,000,000 calls to Mexico and have sold over 33,000,000 cards. In 2007 Viscom was named to INC magazines 5000 fastest growing companies.

Here is a link to the offical press release

Commercial for the On Demand Phone Card

This is a Spanish language phone card commercial for the DMV On Demand phone card distributed by Hi-Tel. Very low budget quality commercial but on par with many other commercials we see for phone cards.

Virgin Mobile USA Rumored to be Cutting 100Jobs

In more bad news for the prepaid business Virgin Mobile USA is rumored to be considering cutting roughly 100 of it's 400 total personnel. The 1/4 of total work force reduction is mostly due to poor performance in it's last few quarters and a shift in the companies strategies to outsource more of it's operations to outside parties.

Virgin is still denying that any final decision has been made and is continuing to review it's overall business strategy.

You can read the full article here

Questions That Will Be Asked Next Week at the InteleCard Expo!

Trade shows are always fun in the prepaid phone card business! It's not uncommon for fights to break out and heated arguments to erupt and the upcoming InteleCard trade show next week in New Jersey is sure to keep up with the tradition.

With all of the news lately here is some of the hot questions and topics I think will be discussed:

1) Has the Federal Trade Commision come knocking on your door yet?

2) What did CTA do to be singled out by the FTC?

3) Have all the carriers listed in the IDT lawsuit really cleaned up all of their cards?

4) Is there anyone out there in the market that can provide me with a card with $1.99 connect fee, a $0.99 disconnect fee and a $0.10 per minute just because fee.

5) How come Intelecard sucks so much... I have read menus with more content than their magazines...

6) Why are we having a trade show for phone cards in Edison NJ? Is Tony Saprano going to be here?

7) Anyone here want to buy Ibasis stock real cheap?

8) Which one of the companies diplaying here will be gone before the end of the year?

9) What the hell am I doing here!

Q Phone Card Commercial

Here is a Spanish language phone card commercial for the Q Phone Card by STI.

New Unlimited Phone Card Will Shake Up Industry!

Europhone USA, an MVNO, phone card distributor and authorized Verizon Fios dealer based out of Port Chester NY, announced yesterday that they plan to introduce an unlimited prepaid phone card to the US market. The card will be available in a $5 version which will give a weeks worth of unlimited calling, and a $20 card which will deliver a months worth of unlimited calling. It averages out to a cost to the consumer of about $0.72 a day.

The card will include unlimited calling to about 40 destinations worldwide but unfortunately I could not find any details yet of what those countries are from either the press release or their website http://www.europhoneusa.com/.

Depending on the countries that are included this card is sure to disrupt the prepaid calling card market in the USA by continuing to devalue the cost of long distance calls. Unlimited phone cards have been tried before and most have failed and I doubt the provider here will be able to sustain this one for long but nevertheless the damage to the overall industry will be felt by this. Hey I am all for giving the consumer a good deal but not when it means that you loose money in doing so!

You can read the full press release from Europhone USA here

Hispanic Demographics and Phone Service

In an interesting article on Meidapost's Marketing Daily web site called "Telecom Pushing Harder Than Ever Within Hispanic Market" the demographics of the Hispanic marketplace in the US are well laid out and help explain why more and more are moving away from phone cards and more to other telecom solutions.

In short order the Hispanic marketplace in the US is spending about 27.3 billion on phone services (17% of the total market) and is expected to rise to about 42.2 billion by 2012. Also noted is that about 65% of Hispanics now have cell phones.

Of note in this article is also that the Hispanic population is also more youth oriented in the US meaning that most are open to trying newer services and testing out the latest technology.

Add these two facts above and you have some of the explanation of why the phone card market is declining. With each passing year more and more telecom companies are targeting the Hispanic community meaning more competition and less sales for prepaid international phone cards.

Read the full article here

IDT Management Merry-Go-Round Stops And Three Fall Off!

On Tuesday IDT announced that two of it's senior Telecom executives are gone! Chief Operating Officer Marc Oppenheimer and Executive Vice President Motti Lichtenstein were said to have resigned (wink, wink, nudge, nudge) and Liore Alroy, former Net2Phone CEO, has been appointed as new CEO of Telecom.

This is a momentous time for IDT, not because of Liore Alroy taking over the ship which should help them, but because it marks one of the first times in a long while that IDT has pushed out executives. Normally the executives just get moved around! To me this move shows that IDT is finally realizing that it has to change and that change starts from the top down! The industry has changed in leaps and bounds and IDTs management has not.

For investors and business partners of IDT this is probably the most encouraging news from the company in years! It suggests that Howard Jonas is finally serious about turning things in his core business around.

You can read the full press release here

Prepaid Calling Card Study Part 2 - On The News

Here is part two of the Univision report on phone cards.

Prepaid Calling Card Study Part 1 - On The News

Recently Univision aired a two part feature story on the phone card business. I'm sorry but this video is in Spanish only.