November Poll Results - Do You Think all of the Recent Legal Action is a Good Thing for the Phone Card Business?

The November Poll Question "Do you think all of these proposed new laws and lawsuits are a good thing for the phone card industry as a whole?" is now closed and the results are in and fully tabulated.

• 82% of you felt all of the legal action was a good thing for the business
• 11% of you felt all of the legal action was not a good thing for the business
• 5% of you were unsure

The results surprised me a little as I would have thought that many in the business would have been a little more pessimistic since there have been attempts in the past to change the business and never to any noticeable effect.

Be sure to vote in this month's poll - What do you think 2009 will be like for the phone card business? To vote just go to the rand hand side of the page and select the answer which you believe most reflects your opinion. Only 1 vote per person please!

October Poll Results - Best Sales Months For Phone Cards

I would like to thank everyone who voted in our October poll "What is the best month for sales of phone cards." The votes have all been counted and here are the results:

1. December received 45% of the votes
2. May was second with 29% of the votes
3. November was third with 16% of the votes
4. August was fourth with 7% of the votes
5. September was fifth with 1% of the votes

All other months received no votes! So it looks like there are really no more than 5 possible good sales months for phone cards. I would like to thank everyone again and please be sure to vote on this months poll.

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?"

Hispanic Institutes Study on US Prepaid Calling Cards

With all of the hooplah recently about the phone card business cheating it's customers, the Hispanic Institute recently conducted a study of over 45 different phone cards from various providers to see what the cards actually delivered and to verify the quality of the calls as well.The tests were performed between November 12 and December 8th of 2007 and the results reaffirmed what the press has been talking about. Most of the phone cards are failing to deliver the true number of advertised minutes.

Of the 45 cards tested, only 15 cards allowed the researchers to use the whole card balance and 6 fell to the opposite end of the spectrum giving 50% or less of the advertised minutes.

The Winners:

• IDT Boss-WSH Mexico - 100% of minutes delivered
• Telmex USA Companero Guatemala - 100% of minutes delivered
• GEO I Love NY Mexico - 100% of minutes delivered
• STI World Mexico - 100% of minutes delivered

The Loosers:

• Diamond Bingo Guatemala - 50% of minutes delivered
• GEO GEO Florida Guatemala - 50% of minutes delivered
• Lycatel Call Me Guatemala - 50% of minutes delivered
• RTG Cocktail Mexico - 20% of minutes delivered
• Touch-Tel USA La Salvadorena Mexico - 20% of minutes delivered
• Telmex Companero Mexico - 10% of minutes delivered

Granted this study also looked at things like call quality and PDD which on any given day can be different and affect the results, but for the most part this is the first published study that I am aware of that looks at this issue. Whatever the methodology used, this study emphasises one thing, the prepaid calling card industry needs to shape up!

The full report can be viewed at the Hispanic Institutes's web site

June Poll Results: Who is Your Favorite Phone Card Provider

Now that our June poll is over I figured I would share the results with all of you. The question asked was "who is your favorite phone card provider" and in total we received 69 votes and here is how you ranked them:

STI 18 (26%)

Ibasis 3 (4%)

IDT 19 (27%)

Locus 6 (8%)

CVT Prepaid 23 (33%)

Just be aware that this survey was in no means scientific and users were allowed to vote more than once. Congratulations CVT for being the most popular with IDT coming in second and STI in finishing in third place.

Be sure to vote on the new July poll question: What is the next best type of product to be sold in the prepaid calling card channel?

Hispanic Demographics and Phone Service

In an interesting article on Meidapost's Marketing Daily web site called "Telecom Pushing Harder Than Ever Within Hispanic Market" the demographics of the Hispanic marketplace in the US are well laid out and help explain why more and more are moving away from phone cards and more to other telecom solutions.

In short order the Hispanic marketplace in the US is spending about 27.3 billion on phone services (17% of the total market) and is expected to rise to about 42.2 billion by 2012. Also noted is that about 65% of Hispanics now have cell phones.

Of note in this article is also that the Hispanic population is also more youth oriented in the US meaning that most are open to trying newer services and testing out the latest technology.

Add these two facts above and you have some of the explanation of why the phone card market is declining. With each passing year more and more telecom companies are targeting the Hispanic community meaning more competition and less sales for prepaid international phone cards.

Read the full article here

Canadian Prepaid Wireless Market

Not to leave our friends north of the border out I decided to write this next post on the Canadian prepaid wireless industry.

Prepaid Mobile Demographics in Canada:

• Total mobile phone subscribers = 17 million
• Percentage that are prepaid subsribers = 29% (double that of the US market at 15%)
• Prepaid mobile growth = the market saw it's largest growth in the early half of the decade with double digit percentages in 2003 and 2004
• Future prepaid mobile growth = The market has reached it's peak and growth is small (less than 1% growth per year) where as the US market has larger growth forecasts.
• Prepaid mobile has a 15% penetration in the total population
• Prepaid mobile brings in roughly 421 million per year in Canada

Provider Market Share:

• Rogers Wireless has 39% of the prepaid market in Canada
• Bell Wireless Alliance holds 36% of the prepaid market
• Teleus Mobility has 22% of the prepaid market
• Aliant Mobility has 2% of the market

Conclusion:

The prepaid market in Canada has matured and peaked at a much faster rate in Canada than in the US and growth, while small, is still going to be happening well into the next decade. Canadians have embraced prepaid more than the US market due to their lower average incomes and necessary expenditure controls.

Statistics are courtesy of http://www.sfu.ca/cprost/prepaid/early.htm

International Calling Destinations on US Phone Cards

While not the most up to date information (the numbers are from 2004), the following data still remains fairly indicative of the current market:

Breakdown by Continent:

• North and Central America = 30% (this has no doubt decreased since 04)
• South America = 19% (this has no doubt increased since 04)
• Western Europe = 13%
• Asia = 10%
• Eastern Europe = 7%
• Caribbean = 6%
• Africa = 6%
• Other = 9%

Breakdown Of Minutes Made Using US Calling Cards by Country:

• Mexico 2,033.3 million minutes
• Canada 948.9 million minutes
• Columbia 801.3 million minutes
• Brazil 629.6 million minutes
• UK 489.5 million minutes
• Dominican Republic 489.0 million minutes
• El Salvador 406.7 million minutes
• Guatemala 361.5 million minutes
• India 331.4 million minutes
• Germany 293.7 million minutes

Some Demographic Data of Interest to Phone Card Providers

I came across some interesting demographic data on foreign born immigration to the US that I though might be interesting to people in the phone card business:

2005 Statistics

* Foreign Born Population of the US represents: 12.4% of the countries total population
* 53.5% of Foreign born peoples come from Latin America, followed by 26.7% from Asia, 13.6% from Europe, and 3.5% from Africa.
* 30.7% of foreign born people came from Mexico, followed by 4.9% from China and 4.5% from the Philippines.
* The amount of foreign born Mexicans in the United States is actually decreasing... went from 3,784,835 in the 90s to 2,796,118 in this decade (granted the decade isn't over but in total % wise of total immigrants, there is definitely a decrease)

To view the source of these statistics and other interesting stats please visit: migrationinformation.org

Canadian Prepaid Calling Card Market

In this article, the third in a long series of articles on the prepaid calling card market, I will provide a quick overview on the Canadian prepaid market and where it is heading.

While those of us in the US had seen the huge boom in the phone card market back in the late 90s, Canada was a little bit further behind in it's market maturity. It was not until the early part of this decade that they began their boom. However the boom was very short lived and the market decline began just after the Canadian market hit it's peak in 2004 (320 million in revenues). The quick decline came about mainly as a result of the emergence in the popularity and acceptance of the prepaid mobile market, which took off much faster than in did in the US.

Since 2004 each year has seen a steady decline in revenues, shrinking to around 310 million in 2005, and currently sits around the 280 million mark. The trend looks like it will continue to decline at a pace of around 20 million a year until well into the next decade.

While the Canadian market appears to be maturing much faster, it is also an extremely different marketplace. Immigrants to Canada are not as credit challenged as they are here in the US and their acceptance of new technologies is much greater than it is here. The mobile phone market appears to be taking over at a much faster rate in Canada with a remarkably bigger chunk of the cell phone market going for prepaid over post paid services. Other services like Skype and Vonage are also eating away at the phone card market with their cheaper and more technologically savvy product offerings.

In short the reality is that the immigrant market, long seen as the primary consumer for phone cards, is much more sophisticated and slightly more well off than the US immigrant market. Immigrants to Canada on average have much greater incomes than their US counterparts.

Quick View on US Prepaid Wireless and VOIP Markets

I received many questions from my recent article "Where Have All of the Prepaid Phone Card Customers Gone? " asking if I had statistics on the prepaid wireless market and the VOIP market so I thought I would take a moment to answer:

US Prepaid Mobile Market:
The Prepaid Wireless market had roughly around 12 million or so subscribers back in 2002 and has more than tripled since then to around 40 million subscribers this year. The largest growth came in 2004 with almost a 50% growth over the year before. The forecasts also show this markets growth slowing over the next few years reaching an estimated 45 million by 2010.

US VOIP Market:
VOIP is the newest kid on the market making it's first noticeable numbers in 2003 with 150,000 subscribers and growing at a consistent pace surpassing the 10 million mark in 2006 and envisioned to continue it's current pace reaching 20 million plus by 2010.

Where Have All of The Prepaid Customers Gone?

Going, Going, Gone!

So many in the prepaid calling card business have been suffering through declining sales as the customer base continues to move towards other sources for making long distance phone calls. We know that many continue to use calling cards because of their convenience and savings, but where are all of the rest going to make their calls?

Calling Card Demographics

As far as I can tell, phone card customers are mostly immigrants and are generally credit challenged. They naturally prefer cash transactions as that is what they grew comfortable within their home country. Credit card availability is also less common elsewhere than in the United States.

What Has Changed?

In recent years, the credit card companies have started to cater to the immigrant population more than ever before, especially in the Hispanic market. As a result more and more immigrants are getting credit cards than ever before. Also with prepaid credit cards getting a bigger push than ever before, many who would have never had the credit status to qualify for a post paid credit card are now able to join the ranks of the credit enabled.

What This Means?

What this means is that many of these former prepaid phone card customers are now able to choose from a variety of other services that have been unavailable to them before: Mobile phones, Prepaid Cellular, Voip and traditional long distance as well.

These other companies have also been making a cognitive push towards the ethnic markets by lowering their LD rates to levels commonly reserved by the phonecard industry. Some, like Skype, have taken it a step further by offering free long distance. It's hard to compete with free so what can you do?

Look Ahead

Diversify, diversify, diversify is the answer! Unfortunately their is no one easy answer as to what to do and the answers will differ by each businesses strengths and weaknesses. Some things to consider: Prepaid Mobile (lower margins but a growing business), Voip services, Internet Affiliate programs and so much more... just put your thinking cap on and give it a try!

Best Selling Phone Cards - March 2007

As a new feature here on my blog, I will now be providing a top 10 list of phone card sales each month. The results are provided courtesy of phonecardmania.com and are not necessarily the best sellers overall, but due to the lack of overall sales tracking for the business, this should prove a good general guide for all in the phone card business.

Top 10 Sellers for March 2007

1) Boss NY (IDT)
2) Minute Wait
3) Star Call
4) I Connect
5) Rescue
6) Ho Chi Minh Tet
7) TCC Spirit
8) STI Free Mass
9) Boss Card LA (IDT)
10) Buena Vista

Christmas and New Years Calling Bonanza

Well the Christmas calling rush has just passed and I saw record numbers going over our switch both on the 24th and the 25th. Oddly for my domestic products Christmas Day was the largest calling day and for my international origination products Christmas Eve was the bigger calling day. I guess in Europe Christmas Eve is the more festive day and here in the US and Canada Christmas Day seems to take the prize. Either way I was very please with the traffic and I hope my customers were pleased with the quality of their calls as well.

The lull has begun with long distance calling now reaching all time lows but that will pick right back up again in another day or so with all of the New Years Eve and Day wishes being spread. Also with Ramadan coming to an end it should be a good amount of traffic coming my way.

January is usually a good month as well with February slowing down a lot!

Most Popular Phone Card for October

I just finished analyzing my sales for October, yes I am a little behind considering November is almost over, and it looks like the FastLink phone card was by far the best seller. In fact it actualy outsold all other by a 2 to 1 ratio. The suprising thing is that the minutes are not the greatest out there but it seems like users are buying it due to better than average quality. The number 2 seller was the Africall phone card.