Tanto Phone Card Commercial

Here is a commercial for the Tanto phone card from Nextcarrier Telecom Inc.

Virgin Mobile Sprint Buyout - Update

About a week ago I blogged about a rumored buyout by Sprint of Virgin Mobile USA. For those of you wondering if this rumor is true... all I can say is I am fairly certain it is going to happen! Maybe not as fast as I originally stated but it is coming and soon. If I was a betting man I would go with this week or next.

Sprint is desperate and are struggling to add new subs... so the only way they can solidify their position is to get more subs through acquisitions (yes I know that Sprint is the underlying carrier for Virgin but the subs are not technically theirs).

Keep checking back as I will post any updates as soon as they happen!

Ibasis Posts 2nd Quarter 09 Earnings - Not Too Bad!

Ibasis released their Q2 earning numbers yesterday and addressed their shareholders. Overall their revenues were down over last quarter coming in at $241.3 million down from $255.5 million in the previous quarter. However, the good news is that they have managed to significantly reduce their operating expenses through vigorous operational efficiency programs and a salary freeze that they implemented earlier in the year. Total operating expenses in this quarter were $21.8 million down from $22.7 million in the previous quarter. They also had significant gains in net Cash available from the first quarter leading to a somewhat more optimistic view by many shareholders.

As for their phone card division, which includes their disposable bodega cards and their e commerce business pingo.com, they stated that they had experienced a 9% growth in revenue and a 12% increase in gross margin (their 4th consecutive quarter with growth in this area). In the second quarter for retail, "gross profit was $31.8 million or 13.2% of revenue compared to gross profit of $37.5 million or 10.4% of revenue in the second quarter of 2008 and $31 million or 12.1% of revenue in the first quarter of 2009 (Seeking-Alpha)."

Overall it looks like Ibasis is keeping pace in this difficult economy and putting a much greater emphasis into generating their own minutes via phone cards as evidenced in their phone card growth numbers.

Feliz Phone Card commercial From IDT

This is a commercial for the brand new card series from IDT called Feliz. The rates on these cards are fantastic!

Sprint Possibly Working On A Deal To Buy Virgin Mobile USA

I heard it from the rumor mill today that Sprint might be working on a deal to acquire controlling interest in Virgin Mobile USA, Inc. I don't know any of the details of the potential acquisition nor do I know exactly when and if this deal will actually go through but it sounds like a deal that would make sense. While I can't site any immediate proof, today Virgin Mobile just executed an amendment letter with Virgin (VEL) granting the company exclusive rights to the names "Virgin Mobile," "Virgin Mobile USA" and "Virgin Mobile Broadband to Go." This move would be of no importance if Virgin Mobile USA was continuing with business as usual!

Sprint is currently the underlying carrier for Virgin Mobile, so integrating their customers into the Sprint systems should be relatively easy. Also with the growth in wireless subscriber count only coming through mergers and acquisitions for the big 4 providers, this deal would certainly be a welcome surprise for Sprint shareholders. The addition of roughly 5 million subscribers to Sprint's true subscriber counts would be a huge move.

This deal, if true, would also remove one of the largest single MVNO competitors in the US marketplace, thus cutting down the competitive landscape. It would be interesting to see if they continue with Virgin Mobile brand name or roll everything into their Boost Mobile prepaid brand name.

So stay tuned to see what happens!

MetroPCS Adds Unlimited International Calling for $5 a Month

Well the phone card business just had yet another big shot across the bow! MetroPCS is now offering unlimited international calling to over 1,000 destinations worldwide for just an additional $5 a month (you must be using either their $40, $45 or $50 plan to qualify). The destinations are mostly those in the 1 cent per minute category like most European land lines, Argentina, Hong Kong and many others. They have been very careful not to advertise the locations and do not post them on their web site. In order to see if the destination you need is included, you must enter in the complete telephone number you want to call in a look up tool they provide.

Prepaid Mobile has probably been the biggest contributor to the decline in the phone card market, with seemingly better attention paid to the international caller, a market for which the post paid companies still refuse to address. Not only has prepaid cellular helped to get recent credit challenged immigrants cell phones, it is now becoming one of the preferred methods to make international calls. I can't say I blame somebody either, straight dialing is much easier than having to worry about buying a phone card and then entering in all of those pin numbers before every call.

I wonder if Boost Mobile, who has seen great success with their $50 a month unlimited package (700,000 new subs in one quarter since announcing the plan), will counter this MetroPCS with a similar international calling add on package? If they do, they can easily negate any market advantage gained by MetroPCS's international plan.

Clifton Telecard Settles Suit With FTC

It was announced today that Clifton Telecard Alliance One, LLC has agreed to a settlement with the FTC in the amount of $1.3 million dollars. The lawsuit was brought against Clifton Telecard back in March 2008 and alleged that CTA had been falsely advertising the amount of minutes available on the prepaid phone cards.

The settlement is to be paid within 5 days and the funds will be wired into a unique bank account for the FTC set up to use for Consumer redress. Any remaining funds will be deposited into the United States Treasury.

The settlement came as no surprise as it is hard to fight the government and win especially when it comes to prepaid phone cards which, let's face it, were engaging in a large abuse of false advertising as a whole over the last few years. However, the amount of the settlement is not much more than a slap on the wrist for a company that produces over 4 billion dollars worth of calling card sales per year.

Source for data in this article = Examiner.com