Vonage Expands Its Unlimited Plan to Include Calling to Over 60 Countries

Vonage, who is desperate to turn the tide against it's churn, has announced that it has expanded it's $24.99 unlimited calling plan to include additional countries. When they first started, the plan only included unlimited calling to the US, Canada and Puerto Rico but about a year ago they added the UK and a few other cheap international destinations into the plan. Well now they have upped the number of countries, adding destinations like:

• Argentina
• Australia
• Bahamas
• China
• Colombia
• Czech Republic
• Dominican Republic
• China
• Poland
• Russia
• Romania
• Thailand
• Turkey
• & Many More!

There is no way that Vonage will be able to make money on these plans with some of these countries they included (some countries costs our well more than 2 cents a minute)! Their fraud department is going to have to triple in size to deal with all of the customers signing up and sending these devices worldwide. Heck, even if they manage to restrict the ip addresses to just US customers, they are still going to have a lot of customers with huge amounts of minutes used. If the call shops get a hold of these they could easily blow this plan up!

Their terms of service list anything above 5,000 minutes as more than normal residential use but 5,000 minutes to Turkey, if you figure a cost of roughly 2 cents a minute, will cost Vonage almost $100 a month... a huge loss!

Anyway you cut it, this desperate move by Vonage is a bad thing for the international calling card business! Our sales are most assuredly going to decline... how could they not... Vonage is basically giving away the call time! How is someone who wants to make a profit and not play any games supposed to compete? This probably goes down as one of the dumbest most desperate moves in the long distance business! Thanks Vonage... hope you take a huge bath with this new plan!

La Doña Phone Card TV Commercial

Here is a cute commercial for the La Dona phone card from SDI.

FTC Crack Down Continues - Diamond Phone Card the Latest Target

The Federal Trade Commission has once again cracked down on phone card distributors, this time going against Diamond Phone Card, Inc. a Elmhurst NY based distributor. The FTC is claiming that Diamond has been misleading consumers with false advertising practices (the same claims as with the ones from before) which stated more minutes on posters than the cards actually delivered. They are also accused of not adequately disclosing all terms and fees on their products and marketing materials.

The FTC has brought the mater to the district court and is seeking an immediate halt order to be issued to stop these deceptive practices. They are also seeking punitive damages, most likely in the millions if you use the Clifton Telecard Suit as a benchmark.

One of the examples given by the FTC was that one Mexico product from Diamond advertised 400 minutes to Mexico but only delivered 106 minutes of calling time.

This most likely will not be last case we see against phone card distributors. It just shows that all of the distributors and service providers need to clean up their act or else it could end up costing them millions.

Read the full article here: http://www.consumeraffairs.com/news04/2009/08/ftc_callingcard_scam.html

Sprint Makes It Official - Buys Out Remaining Stake in Virgin Mobile USA

For those of you doubters all I have to say is I told you so ;)

Sprint finally made it official last week, announcing that they had acquired the remaining shares of Virgin Mobile USA (they previously owned 13% of the company) for $483 million in equity. This resulted in Sprint paying $5.50 a share a big premium considering the stock had been selling for less than a $1 earlier in the year.

Considering Sprint just reported a loss of over$388 million in it's last quarter and a loss of about 257,000 subscribers, this deal is a must for the carrier struggling to make ends meet. The one downside to the new subs Sprint is inheriting from Virgin, is that they are much less profitable ones than the post paid customers. On the plus side, removing Virgin as a competitor, helps Boost/Virgin solidify it's space in the price war ridden and fast growing pre-paid space.

Time will tell how this deal actually plays out but on the surface it seems like it could be a smart move for Sprint.