Poll Results - Which Phone Card Provider Will Do Best in 2009?

The poll results are in and here is how all of you voted on the question of "Which Phone Card Provider Will Do Best in 2009?"

62% of respondents said STI will do best in 2009
12% of respondents said IDT would do best
10% of respondents daid Locus would be better
8% of respondents said Total Call would end up as the top performer
6% of respondents said Ibasis would do best

There is no doubt that STIs recent pick up of CVT puts them in the best position for 2009 but I wouldn't count out IDT, who still controls a very slight lead in market share. While all of these companies know how to do the tried and true, the leader will be the one that branches out and adds new products to their mix like international mobile top up, prepaid mobile, and money remittance.

CVT Prepaid Begins Winding Down

I heard through the grapevine that CVT has starting laying off employees and is beginning the process of integrating into the STI platform. All of their new cards will most likely be created on the STI platform and a migration of pins will most likely take place sometime down the road as well.

The writing was on the wall when STI purchased CVT almost two months ago. It just made no economic sense to maintain and manage two platforms that served the same function. To STI the biggest value in acquiring CVT was in the brand name and removing a major competitor. While I'm sure STI will keep some of the CVT employees, the reality is that they probably won't keep that many as most will be redundant.

It will be interesting to watch how this whole process unfolds and to see how STI will treat the CVT brand name.

September Poll Results Are In and the Winner Is....

Or September poll is now closed and the winner, as chosen by you the readers, for the lucky honor of being October's Phone Card of the Month is.... Los Temerarios card by CVT Prepaid (now STI) with a whopping 45% of the total vote. In second place was the Thank You card from SDI with 18% of the vote and in third place we had a tie between the S Card from Locus and the Boss card from IDT each with 13% of the total vote.

Be sure to vote in this months poll question "What is your best month for sales of phone cards?"

STI Takes Over CVT

I reported about a month back in my post "Rumor - STI in Talks with CVT Prepaid" about the rumored take over by STI of CVT Prepaid... well now it is officially not a rumor anymore!

Inside sources at those companies tell me that the "merger/takeover" is now complete and things are underway in merging the two companies together. For now it looks like STI will continue to utilize the CVT brand name at least for a little while and work to transition over all new pin generating over to the STI platform.

Operationally everything is still intact at CVT and no formal plans or layoffs have been announced about the merger, but I don't doubt that the CVT platform will be phased out eventually, since maintaining two independent calling card platforms makes no financial sense.

I'm sure STI will find some valuable resources in CVT (personnel, technology, hardware) and incorporate those into their operations but overall I think CVT as we know it will be gone by the end of the year. They had a good run but the industry has shrunk too much to sustain all of these companies. I'm also sure it won't be the last consolidation we see in this business this year!

Rumor - STI in Talks with CVT Prepaid

There are rumors coming out that STI might be in talks with CVT Prepaid about a potential buyout. Not sure if STI wants to buy out the company or just buy their brands and active phone cards.

While I have not heard anything about CVT being in any kind of dire financial difficulties, in today's shrinking prepaid phone card market a buyout to gain market share might actually make sense. IDT still leads the way in terms of cards sold but a merger between these two companies would surely put STI at or at least close to the top!

Other than this I really don't have many details to share but stay tuned to my blog for updates!

CVT Pushing Los Temerarios Phone Card

Just got an email from CVT yesterday pushing their new phone card featuring Adolfo and Gustavo Angel from Los Temerarios the popular Mexican musical group. Here is the ad:

Company Profile: CVT Prepaid Solutions

CVT Prepaid Solutions, Inc.

Founded: 1997
Ticker Symbol: N/A (Privately Held Company)
Employees: 60
Location: Great Neck, NY
CEO: Michael (Mike) Acevedo
Fiscal 2007 Sales: $8.2 Million


Timeline:

1997: Founded by former CEO Peter Sicilian under the company name of Orion Telecommunications (OTC).

2001: Performs significant build out of their back end network with the help of Verso Technologies equipment (NACT switching technology).

2004: Citing the inability to handle the volume of sales properly, OTC files for Chapter 11 Bankruptcy protection (http://bankrupt.com/misc/orionconvert.pdf).

2005 (April): Company unveils it's 100 day back-on-track program after emergence from Chapter 11 bankruptcy protection.



2005 (May): company is one of the first in the US to start issuing die cut phone cards with special themed shapes. The first such card was the Mexico Futbol card shaped in the form of a soccer jersey


2005 (August): Company changes name to CVT Prepaid Solutions, Inc. names new CEO Mike Acevedo and moves it's headquarters from Bayside NY to Great Neck NY.

2007: CVT, one of many companies, is sued by IDT Telecom and Union Telecard Alliance for unfair fraudulent practices. They first stand hard, issuing an open letter to the industry denouncing this lawsuit but later in the year agree to a private settlement on the lawsuit.

Sources:
http://phx.corporate-ir.net/phoenix.zhtml?c=105061&p=irol-newsArticle&ID=213901&highlight=
http://www.allbusiness.com/company-activities-management/product-management/5140609-1.html
http://biz.yahoo.com/ic/109/109764.html
http://www.cvtprepaid.com/about/presskit.asp
http://news.moneycentral.msn.com/ticker/article.aspx?symbol=US:IDT&feed=PR&date=20071129&id=7873005
http://www.businessweek.com/magazine/content/07_30/b4043079.htm

CVT Prepaid Solutions Settles Lawsuit with IDT

In a private settlement reached this week, CVT Prepaid Solutions, the most outspoken company against this lawsuit, surprisingly agreed to adhere to the "true minute" program that IDT is pushing. While no details of the settlement were revealed, it is estimated that CVT will join Locus, Dollar Phone, Epana and others who have already agreed in principal to follow ethical marketing practices and promising to deliver actual advertised minutes.

To see the full article go to CNN.com

CVT Kicks the Battle with IDT up a Notch!

This story just keeps going!

In an effort to get the most mileage from the IDT lawsuit against the prepaid industry, CVT Prepaid Solutions has just taken grand standing to a whole new level.

They had subpoenas issued for IDT chairman, Howard Jonas, and UTA CEO Carlos Gomez. CVTs goal is to prove that IDT has engaged, and continues to engage in the unfair practices that they are are claiming everyone else is doing.

In my opinion the whole lawsuit is just a joke and CVT is using this joke to gain a lot of PR and name recognition. Everyone knows that none of IDTs claims would stand up in court and if you ask me, the only thing that could come of this is collusion, which last time I checked is not allowed in the business world.

I am sure this drama will continue, with each making full use of their soapbox!

IDT and Union Telecard Alliance Sue Everyone who is Someone in the Prepaid Calling Card Business

I was shocked when I saw the news on Business Week that IDT and Union Telecard Alliance (their calling card distribution arm) had filed a civil anti-fraud lawsuit against much of what's left of the prepaid industry. The suit claims that various companies have been engaged in deceptive rating practices that prey on consumers to fool them into thinking their products are better and giving an unfair market advantage.

The companies who received the honor include:

1. CVT Prepaid Solutions, Inc.
2. Dollar Phone Corp. (Dollar Phone Services, Inc., Dollar Phone Enterprises, Inc., Dollar Phone Access, Inc.) - this Dollar Phone Guy has a lot of companies!
3. Epana Networks, Inc.
4. Locus Telecommunications, Inc.
5. Total Call International, Inc.
6. STi Phonecard, Inc.
7. Find & Focus Abilities, Inc - Never heard of these guys!
8. VOIP Enterprises, Inc.
9. Telco Group, Inc.

I imagine that it's not just coincidence that the timing of this suit happened to coincide with their Q2 financial results announcement showing that their calling card sales were slumping.

Hey if you can't beat em sue em!

The business does need to be cleaned up, it's just very odd to see it trying to be done this way. It will be interesting to see how this plays out.