Monday, December 31, 2012

2012 - Phone Card Industry Year in Review


Well we are just about ready to say farewell to another year and for the phone card business, it wasn't the most exciting of years in recent history. Unfortunately just like the year before, the top stories continued to be focused around the FTC crack down on deceptive practices in the industry and bankruptcies.

Some of the top phone card related stories of 2012 included:
  • The once powerful STI going into Chapter 11 Bankruptcy protection (Vivaro is the parent company)
  • Skype pushing into the hard card space (available at 7-11, Best Buy and Radio Shack)
  • FTC fining DR Phone Card for deceptive marketing practices (case still ongoing)
  • IDT expanding it's Point of Sale activation products into Rite Aid stores
  • Millenium Telecard paying a 2.3 million dollar settlement to FTC for alleged deceptive marketing practices
  • Consumer Reports publishing scathing review on phone cards finding that most cards tested delivered far lower than the advertised minutes. This report led a month long media flurry around the subject, painting a terrible picture for an industry which cannot afford more negative press!

While all of the above are definitely not positive news items that is not to imply that there were not at least a few positive things this past year. For starters in 2012 there was a huge expansion and mass acceptance of the "virtual" type cards also known as Pinless products. The most popular of which seems to be the IDT Boss Revolution offer followed hot on their heels by VoxCall a SpeedyPin product. Another positive in 2012 was the huge growth seen with the International Mobile Top Up products (IMTU). The margins are a ot lower than traditional calling cards but the consumer demand is there and it has helped many distributors replace some of their lost calling card business.

To all of my readers and those in the business have a Happy and Safe New Year!

Here is to better things in 2013!


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