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

Phone Card Commercial - Week 24

Commercial in Spanish for an IDT Phone Card.

Virgin Mobile USA Faces Class Action Lawsuit

Having just gone public in October of this year, Virgin Mobile USA now faces a class action lawsuit from many of it's shareholders who are extremely disappointed with the poor performance of the stock. The lawsuit alleges that Virgin Mobile USA withheld many actual losses prior to it's IPO and as a result mislead investors into believing the stock was worth more than it actually should have been.

The stock, when first made public in October, was trading at around $15 and now less than two months later it is trading at almost half of it's original value, last trading at $7.28.

Unfortunately this seems to be a trend with many telecommunications companies in recent years, going out high and quickly falling. Vonage went through the same trend when it came out last year. Hopefully this is not an omen for the industry as a whole!

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

Happy Thanksgiving!

Happy Thanksgiving Everyone!

Your Friends at phonecardmania.blogspot.com

Phone Card Commercial - Week 23

A Spanish language commercial for the Hi-Connect prepaid phone card. Not sure if this is just an online card or also available at retail outlets.

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.

Total Call Settles with IDT

Well, chalk up the total to 4 phone card companies who have agreed to clean up their act as a result of the IDT lawsuit. First there was Dollar Phone, Locus, Epana and now Total Call joins the ranks of parties that has agreed to clean up their calling card disclosure and marketing practices. One area of note... they did not admit to any wrongdoing in the settlement.

Still holding out are: STi Phonecard, Inc., Find & Focus Abilities, Inc, VOIP Enterprises, Inc., and Telco Group, Inc. and CVT Prepaid Solutions, Inc.

IDT Finalizes the Purcahse of It's Corporate Headquarters

IDT finalized the purchase of their headquarters building at 520 Broad Street in Downtown Newark New Jersey. IDT has been renting this space from 520 Broad Street Associates, L.L.C. (a.k.a Kushner Companies) since they moved there in 2000. The seventeen story building is located in the heart of downtown Newark and was constructed sometime back in the 1950s.

Under the terms of the deal, IDT agreed to pay $22.8 million in cash and assume the $27.2 million in remaining mortgage payments, making for a total buy amount of 50 million dollars.

The move comes on the heels of the opening of the close bye Newark Prudential Center, the new home of the New Jersey Devils. Maybe an indicator that the city is on the rise, making real estate in the area a potentially wise investment.

Phone Card Commercial - Week 22

A spanish language commercial for the Super Latino prepaid phone card. I believe this product is a Nobel card.

Intelecard Expo Comes to North East!!!

Not sure if this is a fact yet, but if you go to the Intelecard Expo website they have an announcement that there will be an Intelecard Expo in the Northeast. Looks like it will be from April 22nd to the 24th and will be held in New Jersey at the Expo center in Edison. This would be great as there is a large concentration of prepaid distributors and companies here in the Northeast including myself.

I was still kind of confused as I also got a fl yer in the mail from them promoting a Las Vegas show in March as well. Kind of close together if you ask me! Also strange is the fact that they normally do the spring show in Miami Beach. I wonder if this means that the Miami show is now done... I hope not because it always gave me a nice excuse to go down to beautiful sunny South Beach!

Their website does not look like it has much in the way of details yet so stay tuned!

Phone Card Commercial - Week 21

Commercial for an online phone card website. Nothing too high end but fits the bill.

IDT Shuffles Around Management Team

IDT announced yesterday a whole bunch of internal executive changes in the company. Does not look like they are infusing any new blood into the mix but rather just shuffling around a whole bunch of executives! Brace yourself as I am now going to try and describe the changes.

• Yonah Katz - Former CEO if IDT Telecom is now COO of IDT Telecom
• Motti Lichtenstein - Former COO of IDT Corporation is now CEO of IDT Telecom, a postion he held once before.
• Mikhail Leibov - Former head of Corbina (Russian IDT Venture) will step into the newly created position as President of IDT Telecom
• Marcelo Fischer - Former IDT Corporation CFO is now the CFO of Telecom
• Ely Tendler - Former General Counsel for IDT Corporation now goes back to being Chief General Counsel of IDT Telecom, a position he held once before
• Steve Brown - Former CFO of IDT Corporation is now COO of IDT Corporation

I might have missed someone but for the most part it looks as if IDT is making a play to solidify it's Telecom division as more of an independent entity so they can better position it on the market as an independent asset that can be leveraged or maybe even sold on the open market. Hey I would never put these two things past Mr. Jonas based on his past success with flipping companies.

They also announced that executive compensations were being more closely tied to better performance, which I guess means they are all getting a pay cut until the company does better. I guess it's only fair considering they have been laying off people like flies in recent years.

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.

Expanding Beyond Phone Cards to Get More Business

In this article, the second article in a long series of articles on the prepaid industry, we will be covering some alternative products that can be added to the traditional phone card business model. While most of these apply to the distribution business, some can also be applied to service provider model as well.

Prepaid Wireless:

Many traditional prepaid phone card providers like IDT, STI and Oblio have already entered into this market with the expectation that their existing distribution networks will take to the product the same way that they did with calling cards. At the beginning many of the phone card distributors all jumped on board and all signs pointed to big success. But unfortunately the consumer demand for prepaid mobile services in the US had yet to materialize making for some painfully slow sales. Add this to the fact that the distributors had to invest in expensive handsets upfront and were making far smaller margins than they were with calling cards, and you saw a quick decline in the distribution channels willingness to push this side of their business.

The good news is that market demand is finally rising, mostly due to the strong acceptance among the Latin American markets and a greater overall acceptance of prepaid services. There are also far less players today than in years past (no more ESPN mobile, AMP'd mobile and Disney Mobile) making for a less crowded and more profitable industry.

If you are willing to make a little bit of an upfront investment than this can be a lucrative product to add to your mix.

POSA:

Long time touted as the next big thing in prepaid, POSA has generated far more press than it ever generated sales. While I really don't want to get into the finer details of POSA, one thing worth mentioning is that if you can align yourself with the right partners and have the right connections to get into chain stores, this is a product than can help you increase your incremental revenues. To deploy the service you will require a fair amount of technical expertise but don't worry too much about this as most providers are usually more than happy to help in this area.

Also be very careful in this market as there are a lot of patent violation lawsuits on this technology currently being fought over in court. Research your providers and partners heavily to make sure they have the licences, patents and expertise before getting into this business.

International Mobile Phone Rentals:

This is fast becoming a big business here in the United States, with mobile phone rental agencies providing short and long term phones to students and business professionals traveling abroad. The demand for this product is created by the fact that most European countries work on the GSM network, a format not supported by too many US companies, making it almost impossible to use your existing phone outside of North America (some US companies like T-Mobile work on the GSM network but are far too expensive when used for making or receiving calls overseas).

The real challenge with this business is the distribution. In order to succeed you will need to either develop a partnership with a major retail chain like a Western Union or a partnership with travel agencies and even possibly some specific online entities (this last one you can do yourself if you have the e-business savvy).

International Mobile Phone Top-Up Cards:

I had never heard anything about this product until I walked into a Western Union one day and saw an advertisement on the wall to buy top up minutes for your friends and family in Mexico. While I am not sure about how the fulfilment process works (is it through POSA or IVR), it seems to make perfect sense as the Mexicans here are always sending money back home so why not top off their mobile phone minutes at the same time.

The major hurdle here at this point would be finding someone who provides this type of product here in the US. Nevertheless a very interesting product!

Honorary mention:

While the 4 products mentioned above are what I feel would fit the best into the prepaid phone card distribution channel there are a number of other products that can be considered as well like: prepaid gift cards, prepaid translation cards, prepaid Voip, and prepaid utility programs.

Phone Card Commercial - Week 20

A Middle Eastern Calling Card commercial

Ibasis Joins the Movement Towards Cleaner Phone Cards

Well the latest company to join in on the "clean" phone card movement and capitalize on the PR is Ibasis. They announced their new program called "TruePrompts" which will always announce the exact minutes you are going to be delivered.

Is it just me or does it seem kind of odd for a company to come up with a program which basically says we are delivering what we are supposed to deliver... why do you need to come up with a trademarked program to do this?

I guess the phone card business is trying to change it's image in order to gain back some of the customers that they lost due to their previous unscrupulous practices. Too little to late is my opinion!

View TruePrompt Press Release

Shopping for Phone Cards Online

With each passing year, the business of selling phone cards online seems to be getting larger and larger. It used to be that the average phone card user was not Internet or credit enabled but in today's easy credit market, it seems like things are changing. More and more companies are coming out with online stores offering cheap phone cards to the public. Their used to just be a handful of sites like:

blackstoneonline.com
sdicard.com
9278.com
phonecardsavers.com
nobelcom.com

Today we are seeing dozens more sites coming into the mix... companies like

speedypin.com
comfi.com
phonecardmania.com
phonecardsmile.com
and more...

For all of you phone card providers and distributors who aren't selling online today, you are missing out on a very nice revenue stream!

For more info on getting your online phone card sales business going feel free to contact me.

IDT Posts 4th Quarter Results and They Are Just As Bad as Before!

For anyone thinking that IDT will somehow turn their sliding stock price around, history is showing you that this company will not be doing that... who knows maybe they don't even want to turn it around?

The net 4th quarter loss went from 86.5 million in Q4 of 2006 to $112.4 million in Q4 of this year and it just keeps getting worse. Their sales are declining, their revenues are declining, their prepaid market share is declining (in their eyes only due to unfair practices by the competition), their cash on hand is declining and their number of employees are declining. The only good news that I could see is that their Net loss from operations is getting smaller, which means that they have done a better job in controlling their spending.

This company has been through a lot in recent years and should continue through harder times in the future until some of their fledgling business units, other than Telecom manage to get off the ground.