Virgin Mobile USA Releases Special Edition Phone

In a really cool marketing idea Virgin Mobile has created a special edition version of the Wild Card phone by Kyocera that will give those who own one special VIP access at the upcoming Virgin Mobile Festival (http://www.virginmobilefestival.com/) on August 9-10 in Baltimore Maryland. Performers at this show will include: Bob Dylan, Foo Fighters, Kanye West, Nine Inch Nails, Stone Temple Pilots and more.

In total there will be roughly about 15,000 of these special edition Wild Card phones available exclusively through all US Best Buy locations. This move will surely be a hit with their target demographic of teens and young adults and I don't doubt that they will sell all of these phones before the August concert.

La Chulita Calling Card Commercial

Here is a phone card commercial for the Chulita card from STI.

US Considering Bill Requiring Identification for Prepaid Cell Phone Purchases

There is some discussion going on at the Federal and State levels about the issue of requiring identification for the purchase of prepaid cell phones. Up until now individuals could walk into any outlet and buy a prepaid cell phone with complete anonymity, a big selling point for this type of service. However, this same anonymity also causes the phones to be popular with drug dealers, terrorists, and illegal immigrants. Many retailers have begun to restrict the number of phones that can be bought at one time to help curb illegal uses but there is no law requiring this to be done.

Senator John Carona from Texas is leading the charge in trying to require government issued ID to be shown and recorded by retailers in order to purchase prepaid mobile phones. He is also proposing to make it law that no more than 3 phones can be bought at one time. These laws, in his opinion, will help curtail criminals from using these phones.

As you can imagine prepaid cellular phone companies like Virgin Mobile USA are fighting hard against this, citing the fact that they have always worked closely with law enforcement to provide the necessary info to help fight back against these criminals. Prepaid cell phone companies state that the bulk of their users are law abiding citizens who value the level of anonymity and privacy that these phones offer. So why should we penalize the majority for what the minority do?

Another major objection to the laws comes from the cost associated with having to gather and store each and every users personal info. Retailers would have to enter in data to the providers database with every sale and providers would have to spend millions to build and maintain this database. The cost would ultimately have to be passed along to the consumer by paying higher prices for the service.

Even if this bill never sees the light in the Federal governement, many states like Michigan, New Jersey and others are considering their own bills to combat the criminal usage patterns.

Read the full article here

Texas Attorney General Goes After Calling Card Company

Texas now joins the list of local government agencies that are cracking down on the "fraudulent" activities of some calling card companies, joining Florida, New York and New Jersey. Texas Attorney General Greg Abbott filed a complaint in Bexar county alleging that Houston based Next-G Communication, Inc. makes and knowingly distributes calling cards that do not deliver the advertised number of minutes to it's consumers.

State investigators tested the cards themselves and found that in just about every instance the phone cards failed to deliver the number of advertised minutes advertised on their point of sale posters! Most of the cards tested delivered only about 40% of the advertised minutes (the official state report)

The attorney General is seeking an injunction against these practices and is also seeking to levy a $20,000 fine.

Read the Full Story here and here

Epana Calling Card Users to Get Discounts on Prescription Drugs!

In a press release Friday, Epana Networks announced that it would be providing a new loyalty program with the cooperation of HealthTrans Inc. , to provide pharmacy discounts to loyal customers of their prepaid calling cards. The program is mainly aimed at US Hispanics who are on average uninsured and would benefit tremendously from a program like this! The program is being tested for now in cities like: Atlanta, Chicago, Las Vegas and Reno (all areas selected for their high concentrations of uninsured Hispanics) and will eventualy be rolled out in other areas as well.

The end users will enroll for free in Club Bienestar and when they make a purchase of the Mi Carnal phone card they will receive points to their HealthTrans pharmacy discounts. The discounts will average 16% on brand drugs and 55% on generic drugs; though discounts can range up to as high as 70%. Even non calling card users can register and receive base discounts through the Club Bienestar website.

Read the full press release on the Epana Club Bienestar program

Robbery Suspects Caught Trying Buy Phone Cards With Stolen Credit Card

A Chinese foreign exchange student was robbed last week in Worcester Massachusetts by two teenage boys, taking his cash and his credit card. The thieves ran off and later tried to buy some phone cards and cigarettes in a nearby Walgreens. The store clerk refused the purchase saying they did not accept payment for phone cards by credit card and the two individuals left but the store, suspecting fraudulent activity, reported the incident to the police. With the help of the surveillance camera video from the Walgreens, police were able to identify the two individuals and apprehend them not to much later.

Well at least it's good to hear a story about phone card fraud and it not being aimed at the phone card providers or distributors!

Full Story

STI Dallas Calling Card Commercial

Here is a Spanish lLanguage commercial for STI phone cards in the Dallas area.

Suffering Through The Month of May!!!

I can't wait for May and June to be over, as these have been and still are the weakest sales months for me! I know this is not unique to my business as many of my friends have the same complaints. Prepaid mobile saves me a little bit as this part of my business seems to remain steady all year long but phone card sales, which make up for most of my revenue, really takes a nose dive.

With the downtime I have been adding some new products into the mix , like prepaid cash cards (low demand and low profit margin), prepaid home phone service (just acting as an agent), and also picked up one international mobile top up product which I plan to introduce in the coming months. Hopefully some of these new products help counter my consistent decline in prepaid phone card sales.

This business is getting tough and you just need to hustle a lot more to survive but if you keep innovating and moving I believe you can survive and prosper.

Adult Entertainment Prepaid Cards

Looking for another product to add to your prepaid mix? How about selling Adult Entertainment prepaid cards along-side your prepaid phone cards and prepaid mobile phones?

Web Wise is a company offering prepaid adult access cards that allows users to prepay for their online porn by buying a card at their local prepaid retailer (I don't think too many retailers carry this one). They claim that it provides a level of anonymity that credit card payments do not and also boast the fact that there is no need to worry about some sleazy porn site misusing your credit card info.

While the idea may seem like a joke, the adult entertainment industry is multi-billion dollar a year business and this product is sure to get some interest... it will be controversial but will still get interest nonetheless!

You can even buy these cards on ebay!

First Conviction in Prepaid Mobile Phone Trafficking!

The practice of illegal handset trafficking has long been a thorn in most Prepaid cellular phone companies side but as of yesterday Virgin Mobile managed to get the first conviction of an individual involved in this type of practice. Muhammad Mubashir of Texas was convicted in the Texas courts of being in criminal contempt for attempting to export mobile phones to China in violation of an injunction entered against him by the U.S. District Court of the Southern District of Texas in a civil case brought by Virgin Mobile USA. L.L.C.

The handsets, which are usually sold at a loss in order to acquire customers, are bought by the traffickers and then not used with the service but shipped overseas to be sold as a low cost mobile phone to be used with the local carriers. As a result prepaid mobile companies like Virgin Mobile and TracFone, expecting to generate the minute revenue to make up for the hardware loss, have experienced poor huge financial losses instead.

On May 9 last year, an Immigration and Customs agent and a Border Protection officer examined a shipment at Eagle Global Logistics being exported by a company owned by Mubashir, Americas Wireless, to Yeng Fung Trading Company in Hong Kong. The shipment contained 46 Virgin Mobile cellphones, all made by Nokia (model 2115i), that displayed the Virgin Mobile name and logo. An injunction was issued to prevent him from continuing the process but he choose to disobey that injunction and kept up the practice which resulted in his conviction on contempt charges.

View the full story here

Nuevo DMV Calling Card Commercial

Here is a cheesy Spanish language phone card commercial for the Nuevo DMV calling card by STI.

IDT Global Service - "break even by July, (or) it will be closed down"

According to the site seekingalpha.com, IDT global Services, IDT Corporations Israel based call center company has been given a mandate to either start breaking even by July or the division will be closed down.

Once over 900 employees strong, the division is now estimated to be down to around 700 employees and will likely see further cuts in the coming months. The company which handles outsourced call center solutions for US and other international companies, has been struggling, like it's parent company, to keep the business rolling in and is now at a crossroads...get going or get gone! Beyond staff reductions some of the other things the company is trying to do to become profitable is: rent out their other call center in Beer Sheva and Safed, getting rid of paid lunch breaks for employees, lowering salary levels, and increasing sales agents target levels.

IDT Global Services CEO Eli Ninio is rumored to have purchased a bulk of the ownership of the Israeli operations from the parent company.

Virgin Mobile, USA and SK Telecom - Possible Merger

Virgin Mobile, USA announced on Wednesday that they are talking with SK Telecom about a possible merger or business relationship in the US MVNO market place. Virgin Mobile is one of the largest MVNOs with just over 5 million subscriber in the US and SK Telecom, Korea's largest mobile provider, has a US product on the Sprint network (same as Virgin) called Helio and has about 200,000 subs in the US. Both companies declined to comment on any of the details of their discussions, only stating that they are talking.

Helio Mobile was formed a few years back with Earthlink in an attempt to try and gain a share of the US prepaid mobile marketplace, but has been loosing considerable amounts of money on this venture almost since the start and they just have not been able to grow the subscriber base enough. The guess is that SK Telecom is looking for a way out of this money looser and Virgin seems to needs the subscriber growth... so the marriage seems to make sense. The logical step, should this deal go through, is that the Helio brand would disappear and everything would be transitioned over to the Virgin Mobile product line. Since they are both using the Sprint network then the transition should be easy and relatively painless for both Virgin and Helio customers.

Shares of Virgin Mobile, USA shot up almost 43% as a result of this announcement!

Termination Rates to Pakistan Rise by 100%

In one of the largest rate increases in recent months, the termination rate to Pakistan has doubled from around 5 cents per minute to just above 10 cents per minute and the rate is expected to climb even more. The move is a result of the Pakistani government (PTA) making changes to help local Pakistani Telco companies be more competitive and profitable in the recently deregulated market as well as reduce "grey market" activity. The increased costs will also help Pakistani Telco's pay for long term improvements and updating of the countries telecommunications backbone.

Many companies have yet to adjust their rates on their international calling cards and their are still deals to be had but this should not last long as more and more companies take action to increase the rates to keep up with costs.

For more details see this online article

Commercial TV La Leyenda Lady in Distress

Here is another Spanish language commercial for the La Leyenda phone card by IDT.

Employee Steals Over $450,000 from Coinstar Machines

Here is an interesting story...

An employee of Coinstar, the popular grocery store coin counting machine that allows you to turn your change into cash (or the option of buying gift cards and phone cards), was recently arrested for having stolen over $450,000 from Coinstar machines throughout Washington State.

Michael Burns, 39, worked at one of the companies warehouses re-manufacturing machines and therefore had intimate knowledge of how to bypass the security features. Even though he was not an authorized field worker, that did not stop him from dawning a Coinstar uniform and visiting over 14 stores to pretend like he was servicing the machines.

Coinstar contacted police when they noticed $17,500 missing from one machine and the search led to Mr. Burns. When found, Burns had over $130,000 of cash, high priced electronics, a 2007 GMC Denali, a brand new 2008 Harley Davidson motorcycle, and more paper trails of other monies all in his home.

Burns is currently being held on charges of first degree theft.

Don't worry... he didn't steal any phone cards :)

Meijer Supercenter Partners with Fusion on Prepaid Mobile Offering

Meijer, who operates 181 supercenter stores throughout Michigan, Ohio, Indiana, Illinois and Kentucky, has announced that is has partnered with Fusion Mobile, an Austin Texas company to provide a private label MVNO product to be sold exclusisevy in all of their stores.

The product is called Meijer Mobile and has it's backbone provided by Sprint PCS. The phones will be completly prepaid and will include the usual no credit checks and no contracts but will also include a few attractive freebies like unlimited nights and weekend minutes, domestic long distance, cheap text messaging, voicemail, caller ID, and three-way calling. Some of the other benefits will include web access for only $0.20 a day, $0.10 text messages and cheap calls to Mexico (only $0.025 per minute).

Currently they are offering hardware from LG and Samsung which includes the LG 125 for $69.99, the LG 150 for $99.99 and the Samsung M300 for $129.99.

The phones are available now for purchase in stores or online.

IDT Global Reduces Workforce In Israel

It was reported last week that IDT Global Services, a division of IDT Corporation, is believed to have laid off roughly 150 employees from it's call centers in Jerusalem, Tel Aviv and Be'er Sheva Israel. The cuts are rumored to have happened as a result of IDTs poor financial situation and the rumored sale by Howard Jonas of this division. IDT is one of the largest employers of English speaking people in Israel and this layoff will make it tough for those Eenglish only individuals living in that country as there are not many jobs for those that don't speak Hebrew. According to reports most of the individuals laid off were on the management and administration side.

This marks a huge change in the Howard Jonas's philosophy which has always prided itself on being a contribution to the Isareal economy and it's job market. However, with such hard financial times being faced by IDT, they have no choice but to consolidate operations in order to curb their bleeding. No doubt this will not be the last we hear about workforce reductions for this company with others sure to follow.

Report

Commercial for the Geo Phone Card

Here is a commercial for the Geo Phone Card, a pinless phone card with good rates to India, Pakistan and Bangladesh. Believe it or not this commercial is not in Spanish!

One Of The Reason Why The FTC Has Targeted CTA?

Just from having searched the Internet I think I can see why why Clifton Telecard Alliance is being singled out by the Federal Trade Commission. I did a search on Google on CTA and I came across a bunch of sites with complaints about their cards:

Complaint #1 - African Dream Card

Complaint #2 - Hello Africa Card

2007 Court Case Against Clifton Telecard Alliance for Fraud

Better Business Bureau has 36 Complaints filed in last 36 months - They have the BBBs lowest rating

Just to be fair, a search on many calling card distributors and providers would probably yield similar amounts of complaints, but it sure didn't help CTA's cause here... It probably gave more fuel to the fire.

CTA is going to have a lot of work ahead of them fin the coming months fighting off the federal government and if other companies don't clean up their act and fast the government might be after them soon as well.

Here is a link to the FTC complaint against CTA

Ibasis Q1 2008 Earnings Call

Ibasis conducted their Q1 2008 earnings call on Monday and the news was not good. Their stock tumbled almost $1 on the news of the poorer than expected results. They posted a loss of $2.1 million, or 3 cents per share, on sales of $324.9 million dollars.

As for their retail calling card business here is how Ofer Gneezy addressed the topic:

"The retail prepaid calling card market was hampered this quarter by the general softness in the US economy and other factors affecting the employment of migrant workers, a demographic that the accounts for a significant portion of prepaid calling card usage. This factors in the continued effect of the industry transition to more transparent pricing combined to put pressure on our retail business in the quarter. Along with other major providers in the calling card industry, iBasis is playing a leadership role in the creation of an independent association of prepaid calling card providers that will establish standards of ethical business practices and monitor the industry and effectively certify vendor services. We believe this trend is very positive for consumers of prepaid calling products and for iBasis, as we have a significant advantage in our network in low cost of operations. In the mean time, we continue to work with high integrity distributors and market quality products that create value in the iBasis brand."

Sounds like a chapter taken right out of IDT's earnings call to explain the poor performance of the calling card business. Why can't these guys just come right out and say it that the phone card buisiness is not and will not be what it used to be! At least they could help manage investors excpectations. The quote above is from the full earning call transcript which can be viewed at Seeking Alpha.