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It's Been a While Since I last posted so I thought I would start out the New Year right with a new Phone Card Commercial!
Enjoy & Happy New Year!
In the latest news on the Vivaro Corporation Bankruptcy, a joint venture lead by Angel Telecom, Next Communications Inc. and Marcatel Telecommunications, LLC announced last month that they have acquired all of the assets of Vivaro Corporation and most all sub company assests. The joint venture company is to be called Next Angel LLC, with Angel Telecom having the largest stake at 42.5% overall.
Vivaro and six of it's sub companies including STi Prepaid, STi Telecom, Kare Distribution filed for Bankruptcy protection back in September of 2012 after running into some significant cash flow issues due to various missteps by the company in recent years. The companies main business revolved around selling prepaid calling cards to the Spanish speaking customers in the US and was once a very dominant player in the prepaid phone card industry.
Angel Telcom AG was founded in 2004 and is located in Switzerland. Their website which now shows as under construction includes a brief blurb about it's new aquisition and it's stargey going forward:
"as you already might have heard this year started out to be very exciting for Angel-Telecom. Significant network expansion and the successful acquisition of 42.5% of the assets of Vivaro Corp. in the US made us decide to give our website the long needed work over. We will soon be back with our relaunch1"It's clear based on some comments posted in another article by Peter Waneck, Angel Telecom's CEO, that they truly believe in a solid future for prepaid calling cards, but also acknowledge that only through strong management and forward looking behavior will they achieve success. Seems a little vague to put much belief in it, especially to those of in this business for years. Time will tell I guess but I wish them all luck!
I recently came across a list of some of Vivaro Corporation's outstanding creditors and the payment amount claimed to be owed. Here is a list of a few of the companies who have filed a claim with the courts to date:
It has been about three months now since the powerhouse phone card company Vivaro Corporation and it's child companies STI Prepaid LLC, Epana and Kare Distribution entered into chapter 11 bankruptcy protection (filed Sept 5th 2012). The company continues to operate but it is not clear as to how long they can continue to operate in this environment as some of their distributors begin to withhold payments (more about this later). Unfortunately since the initial filing news has been limited and the company representatives mostly tight lipped so I thought I would put out a post with all of the updates I could provide.
Vonage put out a press release today announcing the launch of it's new stand alone, Digital prepaid calling card offering. A first for Vonage! They have long had a calling card feature bundled with their home phone service but they never offered a stand alone calling card until now.
The card is available exclusively online and is can be purchsed in $5, $15 or $25 amounts. The $15 purchase amount comes with a limited time intro promotional $5 bonus and the $25 purchase amount comes with a limited time inro promotional $10 bonus. The product seems to have very aggressive, yet not rock bottom, A to Z rates on par with it's main competitors like Pingo and PennyTalk. Some sample rates for the card are as follows:
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| New Vonage Digital Calling Card |
To make inroads into the the Mexican marketplace, Skype announced this week the introduction of Skype Prepaid Cards. These cards will help Skype get into this largely non credit card market by making two different types of prepaid cards available at local stores like 7-eleven, Best-Buy, and Radio Shack. The cards will be available in a 100 pesos format (unlimited calling to US and Canada) and a 150 pesos format which will provide a PAYG balance so users can call anyone of 170 countries world wide.
This move is sure to better position Skype in the huge Central American marketplace and one that will no doubt get the local operators to take notice!
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| New Skype prepaid cards now available in Mexico |
The latest phone card distributor to be slapped on the hand by the FTC is DR Phone Card owned and operated by David Rosenthal, a long standing distributor of prepaid calling cards dating all the way back to the Econophone days from the early 2000s. The FTC is suing the company for deceptive advertising practices using terms like "No Fees" on posters for cards where there were fees and for delivering less than the advertised minutes on its cards. The FTC tested 169 of the companies cards and on each and everyone found that they delivered far less than the advertised minutes. In fact they found that most delivered less than 50% of the advertised minutes. If the lawsuit is successful, consumers most likely stand to get some relief in form of minutes or some sort of other type of financial settlement.
Pending the court hearing DR Phone Cards has agreed to stop all "deceptive" practices the FTC lists in it's suit and has agreed to cooperate fully with the FTC and the courts on this matter.
To read more on the suit, visit the FTC web site.
In what will sure send shock-waves through the phone card business, the US Government recently announced that it has passed a law banning the sale of prepaid phone cards. Congressional spokesman Dr Pepper issued the following statement: "Phone Cards are just bad and we don't want them sold anymore." The ban is set to go into effect starting today April 1st and lawmakers are wasting no time on their next major law, the ban of sugar in chocolate followed by.... April fools!!!!!
It's hard to believe that only 10 years ago the payphone market was at its peak with over 2 million payphone scattered throughout the United States. You couldn't walk for more than 100 feet in any direction in a major city without seeing one! Today you would have to walk for miles to see one! The American Public Communications council now estimates that there are approximately 400,000 payphone left in the US and declining at a rate of about 10% per year.
I can't say this is a surprise. The proliferation of the cellular phone has made the payphone much less useful. In fact the decline of the payphone matches u exactly with the growth of the mobile phone market. Today almost 90% of Americans use cell phones and with the recent popularity of prepaid mobile, even the recent immigrants and lower classes also now own a mobile phone. It used to be the convenience store always had a payphone outside for the immigrant groups to go and use their phone cards to make a call back home but today, those same people now walk out of the store, pull out their cell phone and use their phone card to make the call.
The major telecommunication companies have already abandoned this once hugely profitable business with Verizon selling off most of it's payphone to PTS in 2011 (AT&T and Sprint sold off their businesses in 2008 and 2006, respectively). There is still a market out there for payphones especially in high traffic service related public areas like airports, train stations, hospitals and rest stops, it's just going to take you a little longer to find the one or two phones which are now most likely hidden off in a corner somewhere. If it continues this way, 10 years from now the only place you will be able to find a payphone is in a museum!
Stats courtesy of the Payphone News
IDT has been selling phone cards in Walgreens stores for years but this month IDT announced that they have an agreement to sell IDT Phone Cards in Rite Aid stores across the country. The cards will be available in approximately 4700 retail locations in 31 states and will be co-branded with the Rite Aid logo. The cards will feature minutes ranging from as low as 150 per card all the way up to 2000 minutes per card and range in price from $5 to $50.
"IDT has been an industry leader for over 15 years and brings to Rite Aid a wealth of experience providing practical, prepaid communication solutions that we believe our Rite Aid customers will use and appreciate," said Bill Renz, Rite Aid vice president, consumables. "As an added incentive, customers who recharge an existing card with new minutes from a Rite Aid store will receive 10 percent additional minutes for free."
The deal probably means more in name than it does in terms of added revenue, but it still is a significant accomplishment especially in the declining hard card market. The deal also helps IDT push it's services to the mainstream as most of the companies success with hard cards has come from the recent immigrant consumers and not the mainstream.
