Phone Cards and Pending Legislature - Nothing New!

As you read in two of my earlier posts two government officials, Congressman Eliot Engel from New York and Florida Attorney General Bill McCollum, have recently taken up the fight against the "corrupt practices" of the prepaid calling card industry. Spurred on most likely by the recent lawsuit by IDT against it's competitors and the accompanying press that this brought to the industry (NY Post Article and the recent Business Week story).

It's not the first time that the industry has been investigated by government officials but what makes this time different is that one of the industries own is leading the charge. While it looks like the only thing that will change is that calling card companies will just have to write down longer disclaimers, the "standard practices" probably won't change much! Customers demand lower rates and the only way to get "your slice of the pie" is advertising the lowest possible rate even if the fees have to be high to get to that rate.

The fact of the matter that the once lucrative business is drying up... I like to use the analogy, it's like putting a bunch of lawyers in a room and telling them the guy in the corner is the only potent ital customer they have left! They will beg borrow and steal to get that guys business! It's the bad side of the business but I guess my point is that the current behavior is not unique to the calling card business.

Phone Card Commercial - Week 12

Here is another interesting commercial for a Vietnamese calling card from a company called Lunex Telecom.

Congressman Eliot Engel pushes Calling Card Consumer Protection Act

Looks like another politician is trying to clean up the international calling cards business. Congressman Eliot Engel, who serves parts of Westchester and Putnma counties in NY, is in the process of introducing a bill called the "calling card consumer protection act" that would regulate the practices of calling card issuers forcing them to clearly deffine all fess and taxes and provide a clear "live" operator phone number where consumers can call to get more information on the card or assistance.

Read the whole thing at the Mid Hudson News

Detroit Phone Cards Up for Sale!

Looks like Rami Chahine, President and Owner of Detroit Phone Cards may have a buyer lined up for his phone card distribution business. Pavis Corporation, a telecommunications carrier with a strong calling card business, has signed a letter of intent to purchase the company (read more about Pavis in Yahoo Finance). From the press release it says that Detroit Phone Cards has 24 million in annual phone card sales and another 6 million in prepaid mobile sales. The claim is that the acquisition will help Pavis strengthen their calling card and prepaid wireless business but I can't help but wonder if this does not have shades of the Clifton Digital acquisition by Telstar International from years back.

In my mind there are only two reasons that a phone card distributor would be bought; Because they owe a carrier lots of money and the carrier can't afford to let the distributor die and risk not getting anything back (i.e. Clifton Digital/Telstar deal) or the carrier wants to secure a distributor and try to copy the successful IDT/UTA model (Epana/Hector tried this a while back).

Either way this is a significant happening in what has been a relatively quite couple of months in the prepaid world. Detroit Phone Cards has been around for a while and in this business that says a lot. I wish them luck with the endevor!

Phone Card Commercial - Week 11

Here is a commercial for a company called RingPakistan.com which is not too bad.

Verizon Launches Prepaid Translation Card

OK Now I have seen it all.... Verizon just announced the launch of a new prepaid calling card service that will provide on demand language translation via a phone call. Aimed at travelers, business men or anyone interacting with people who either speak no English or just a limited amount, the card provides translations to and from over 170 different languages. These cards are fully rechargeable and offer 24/7 access for Spanish translation and more limited hours for other languages.

Verizon is carrying all of the cards and marketing it with the Verizon name, but the actual translation service is being provided by Language Line, an existing translation call center. Cards can be used from the US or over 100 different international locations and are available in $35, $50, and $100 denominations. From what I can tell the service is not cheap and those cards will be eaten up fast...

To find out more about this product visit http://interpreter.verizon.com/

Florida Attorney General Subpoenas Calling Card Players

Florida Attorney General, Bill McCollum, has decided to take on prepaid companies and see if their offerings are really as deceptive as everyone says. Most likely spurred on by the press from the recent IDT/UTA lawsuit brought against other calling card companies for "unfair business practices."

McCollum has subpoenaed some major calling card players like: CVT Prepaid Solutions, Inc.; Blackstone Calling Card, Inc.; Alternatel, Inc.; Prima Communications, Inc., also known as PCI; Cinco Telecom Corp., doing business as Orbitel; Cristel Telecom, LLC; STi Prepaid, LLC, doing business as STi; Union Telecard Alliance, LLC, also known as UTA; IDT America, Corp, also known as IDT; and Total Call International, Inc., also known as Total Call Mobile, Inc.

I can't really see this going anywhere substantial or doing anything of note other than give McCollum a little positive press. IDT/UTAs lawsuit is going to go nowhere just like this investigation. Prepaid has been doing deceptive business practices for years and I can't tell you how many times I have seen this witch hunt conducted in the past with no results!

Blackstone Out of Trouble!

In a follow up to a story I posted about back in February, Blackstone has successfully fought the fine that the FCC brought against them for failure to file the appropriate papers for a licensed telecommunications carrier.

Blackstone apparently ignored requests from the FCC asking them to file and make certain types of paperwork available and as a result was hit with a $20,000 fine. Blackstone has since provided the paper work proving that they are not a long distance carrier, just a distributor, and as a result the $20,000 fine has been removed and the matter dropped.

A lot of distributors make claims to be carriers, but as you can see the risk is too great and the cost too high. Blackstone is a more well established company with good legal representation and had the ability to get out of this fine but many smaller distributors should beware!

To read the complete ruling in this matter go to the FCC Website.

Will SunRocket's Closure Mean More Business for Us?

The VOIP world, which has been gaining lots of popularity due to Vonage's huge marketing spend, has experienced a huge blow this past week with SunRocket closing it's doors. The potential set back this had for the industry as a whole had so many of the major players worried, including Net2Phone and ViaTalk, that they rushed out and offered to pick up many of the remaining months of service for these customers free of charge.

SunRocket had about 200,000 customers at the time of it's closure, most of whom were locked into long 1 or 2 year contracts. What hurt the most was the fact that the customers had prepaid for their years of service and in the end were left holding the bag. Add this to the fact that Vonage is on shaky ground with the impending punitive patent infringement lawsuit from Verizon, and you have an industry whose future does not look so great.

For those of us in the prepaid calling card market can we look at this like one man's failure is another man's gain? It is still unsure how much these VOIP services contributed to the downturn in the phone card business in the first place, but it would be hard to believe that they did not at least play some small part in taking customers away. But before you go thinking that the business will go back to where it was, think about it long and hard. Some will come back but unfortunately it will most likely not be too many!

There are still so many other attractive long distance services gaining momentum like: prepaid mobile phones, Free PC to PC clients (Skype), Callback, Unlimited calling plans from traditional PTTs and many others. With all of these companies chasing the same pie, it is doubtful that prepaid phone cards can regain much. We are just an older out dated model whose only play left is with lower pricing and appealing to the credit challenged and recent immigrant markets (a group that is also becoming more savvy to the other alternatives).

Don't get me wrong... I am not saying prepaid phone cards are going to disappear tomorrow, it's just that this impending hardship in the VOIP industry is not going to mean many more sales for us!

Phone Card Commercial - Week 10 - Homies

A really budget commercial but I love the card name and concept!

Get a Pizza and a Phone Card!

Just read an interesting press release that a pizza chain out of Texas, Pizza Patron, will begin selling unlimited Mexico calling cards in all of their restaurants. The service is provided by BlagCard(TM) and the calls are mainly carried by at&t. Pizza Patron currently has over 60 stores in Texas as well as in a few surrounding states, with another 40 or so chains set to open within the next year.

Cards will be sold in $5, $10 and $30 denominations, delivering either 2, 7 or 30 days of unlimited calling to Mexico.

While the press release does not say if these cards will be available with delivery of a pizza, it is an interesting concept and truly a unique partnership the likes that this industry has never seen before.

IDT Gets A Bum Rap!

I keep getting questions and comments about IDT like so "How long do you think IDT has left?" and "Man do they suck" but somehow I can't help but feel like IDT is getting a bad rap!

I think people need to take a step back and realize one thing, if IDT is doing bad then most likely the other phone card companies are doing bad. The only difference is that IDT is a publicly traded company and all of their results have to made available to the masses, while the other companies can hide their woes.

The reality is that the phone card business is not what it used to be and never will be as big as it was ever again. However, this does not mean that international calling cards are a dead business, there is still a large market, it just will not provide the numbers like it used to do. I can't help but wonder if we were all allowed to see the financials of companies like STI, Dollar Phone, Locus, CVT, and Oblio that the downward trend would be the same!

Phone Card Commercial - Week 9 - Max

Sorry Everyone... Was out on vacation but I thought I would get back into the swing of things with this great phone card commercial from Europe for the Max calling card.

Enjoy!

Phone Card Commercial - Week 8 - TelePinoy

Here is a Filipino commercial for the TelePinoy calling card. A little higher production value than some of the Spanish language ones but still on the low end.

Titan Global Holdings, Inc. Acquires Ready Mobile

Titan Global Holdings, Inc., the parent company of Oblio, announced that they have completed the acquisition of Ready Mobile, a prepaid wireless company with over 9 million dollars in revenue per year and 30,000 subscribers. Ready Mobile also operates under the brand name Mojo in some markets.

This acquisition is expected to help Boost the Oblio wireless brand and give them a greater share of the prepaid MVNO business.

To read more about Titan go to their web site: http://www.titanglobalholdings.com/

Amp'd Mobile Files for Chapter 11 Bankruptcy Protection

The struggles for the nations leading MVNOs continue with the recent chapter 11 bankruptcy protection filing by Amp'd mobile. It looks like they have a debt of just about 100 million and owe about 1/3 of that to Verizon Wireless, the carrier for this MVNO. They also owe almost 16 million to Motorola.

Oddly enough Amp'd claims that the cause of this filing is not because of poor buisness, just the opposite. They claim that they have been growing too fast, adding 20,000 customers a month since late last year, and just have not been able to keep up with the back end infrastructure.

They hope that this bankruptcy protection will give them the room and time they need to get caught up.

IDT Telecom Cuts 300 Jobs

I forgot to post on one of my earlier posts that IDT announced during their earnings call that they have just cut 300 jobs from the Telecom division. Add this to the 570 or so jobs cut in late summer last year and the company is pushing almost a 25% reduction in its work force from last year (Yahoo had IDT listed at 4,000 employees up until last week when they adjusted this number t0 3,000).

Based on their poor performance, bleak prognosis on new businesses and sharp quarter after quarter of declining phone card revenues, it is probably not the end of the layoffs either.

Phone Card Commercial - Week 7 - Very Cheesy!

Here is a phone card commercial I found for the La Catedral phone card. It is in spanish and was obviously done on a low budget fro some local cable channel.

IDT Announces Disappointing 3rd Quarter Results

On Wednesday IDT announced their 3rd quarter results and the picture looked bad. Their net loss, 15.9 million, was nearly double that of Q3 from 1 year ago (8.6 million). Revenue was announced at $485.4 million down from $547.2 million 1 year ago.

This seems to have caught many off guard as most analysts, who up until Wednesday had IDT stock as "hold," quickly changed their recommendations to "sell." While IDT officials kept up beat and political during the announcement, they drew no detailed plans of how they were going to turn the company around. Instead they kept blaming the poor performance on "the unfair business practices" of other calling card companies, a point of contention for them and the subject of an ongoing lawsuit.

The reality is, that unless IDT figures out how to be something other than a phonecard company, they are in for disappointing quarter after quarter.

To read the full details of the announcement go here: IDT Third Quarter Results

IDT Telecom Names Mikhail Leibov as Chaiman

This week IDT announced the appointment of Mikhail Leibov as Chairman of IDT Telecom. It appears as this is a new position and existing CEO, Yonah Katz appears to be remaining on as CEO despite rumors that he may be on the way out (obviously very unconfirmed rumors).

Not sure what the responsibilities of this new position will be, but it looks like they will be counting on him to turn things around on this troubled ship. No word yet as to if this position is ranked above the current CEO or below but I'm sure that will become clear sooner or later.

Leibov's claim to fame was with Corbina, a small Telecom start-up venture that grew into a profitable company offering wired and wireless telecom services throughout 24 industrial areas in the Russian market. He has also served various positions at AT&T, Prodigy and IBM.

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!

Calling Card Illusion

This guy cuts a calling card in half and then has it magically reappear in one piece. Watch and listen carefully and you will see his illusion is not as good as it seems.

After he cuts the card you see one of his hands disappear and you hear rustling like he is looking for something on the table (palming another calling card). Then he does a bunch of hand action and you see the cut phone card fly out of his hand.... Good try though!

Phone Card Commercial - Week 6 - An Old One

Just thought I would give everyone a throwback commercial... going back to the early 90s, this was a New England Telephone phone card advertisement.

Prepaid Press Virtual Conference & Expo

I just have one question, who in the world came up with this idea for a prepaid virtual expo?

The Prepaid Press, a regular news paper publisher for the prepaid industry, decided to start a "Virtual Expo" rather than host one in a hotel or convention center. They claim it is a great thing that will allow you to participate, view and contribute at your own schedule. The seminars will be available for days after they have first been conducted and the virtual exhibit hall will also be up and running for weeks.

Call me old fashion but I am partial to actual going to a conference, not attending from my desk!

Attention Wal-Mart Shoppers

VOIP is going mainstream with a recent announcement that about half the Wal-Mart stores in the USA will now be carrying Skype on it's shelves. Most stores will be carrying $20 prepaid Skype Out cards, while some others will also be carrying bundled Skype packages, including 3 months of the unlimited service along with a headset and/or video cam.

Roughly 10% of landline phone service in this country comes from VOIP services but now with Wal-Mart, the retailing power house, VOIP is sure to get more of that market share.

So why not head on over to Wal-Mart and pick up some deodorant, milk, shoes and a Skype prepaid card.

Warning - In State Phone Card Calls Cost More

Just an FYI for those of you using phone card calls within the same state, extra fees will apply on some phone cards. Recent FCC rulings make phone card providers subject to many of the same tax laws as those of your local phone company. On out of state and international calls, you won't notice any changes, but on in state calls you will see a huge increase. For example the at&t phone cards will now charge 5 minutes for every 1 minute in state call. These extra charges are the phone card providers way of paying the new taxes.

Please note that only some companies are charging the increased fees and many others are choosing to eat the costs rather than pass along to their end users.

All in all this ruling is just another step towards bringing us back to a monopolistic telecommunications industry.

Phone Card Commercial - Week 5 - Global BTI

This commercial is a little higher production value than some of the others and takes a new approach to bringing family and friends closer.

Virgin Mobile Going Public

I just read today that Virgin Mobile has started the process for turning the company into a publicly traded entity. They filed a registration statement with the Securities and Exchange Commission this week and while the details of how much and how many stocks will be available, it looks as if this will be going forward.

They have long been rumored to be going public but today confirms the rumors. Being that they are one of the few successful MVNOs in the business, I don't see how they can miss with a public offering. I will be in line if the price is right!

Good luck Mr. Branson!

Phone Card Commercial - Week 4 - Mexicanisima

Another Spanish language phone card commercial for the Mexicanisima card from Ibasis.

Vonage... Please Just Go Away!

Last week Vonage managed to get a stay on the order requiring them to stop signing up new customers until their appeal is heard and Vonage, fearing for it's life, has started a campaign called "Free to Compete" (http://www.freetocompete.com/) that is urging it's customers and supporters to fight the "wrongful" tactic of Verizon to shut them down. The claim, in short, is that Verizon doesn't like Vonage because they are offering competitive rates which lure their customers away and that Verizon likes to rip people off...

While I do like lower prices, I have to admit that Vonage's long term plan on making money is non existent and even without the lawsuit, I think Vonage would have been out of business within 5 years anyways. Their cost per acquisition is just way too high and they are not physically responsible for paying for the wires that supply our homes with Telephone and Internet, both services that Vonage could not exist without.

Your Cable provider and Verizon, have to charge higher rates because they are responsible for providing and maintaining these wires into your neighbourhoods and houses. It is for this reason why you have to pay more... Verizon has to pay for the infrastructure and they don't charge the higher rates because they want to be greedy pigs but because they have to!

There is no doubt that Verizon maybe a little greedier than they should be and that competition will benefit the end user, I just don't feel like Vonage's business model and pricing should be allowed considering all of the issues above.

Intelecard Expo in Miami Wraps Up!

Well, another Miami InteleCard show is now over and while the show is now more about other solutions than prepaid phone cards, it still attracts a lot of exhibitors and attendees. The show floor was packed with people both days and of course there were the traditional fights breaking out here and there (two guys almost took out the bar at the CVT booth).

CVT had a nice booth and UTA, the last minute exhibitor (they must have gotten a good price), also had a decent looking booth. But I think the best part about the show was that it allowed all of us to get together with our peers and discuss business and new opportunities. I had a good time meeting with some of the prepaid wireless and cash card companies who have opened up some interesting possibilities for my business.

Having been on both sides, a few times as an exhibitor and the last few times as an attendee, I have to say that NOT exhibiting allowed me to get more business done than with a booth. The booth is just too restrictive, allowing me to only meet with people who come my way... and lets be honest, most of the time you have to chase down people to get the business relationships you really want!

I didn't manage to get to the party but overall I have to say that InteleCard did a nice job with this show and I look forward to the Vegas show later in the year... Just one parting comment... how come InteleCard manages to still have success with the trade shows but their magazine is tanking big time?

At&t CEO Retires and Cashes In Big Time!

On Friday it was announced that at&t chairman and chief executive officer, Edward Whitacre is retiring (65 years old) and as a parting gift he will be getting a 158.5 million payout. And you thought telling your kids to become a doctor or a lawyer was the best way for them to make big money.

Being an executive of a large corporation is quickly becoming the fastest way to becoming a billionaire these days.... Believe it or not this was not the largest payout to a Chief Executive Office, that honor is held by former ExxonMobile CEO Lee Raymond, who received a 351 million parting gift back in 2005. In fact this was only the thrid largest parting gift, behind a former Wall Street Executive Richard Handler who received a measly 202 million parting prize.

Whitacre has been a long time CEO (17 years) with SBC and now at&t and no doubt moved this company into a position of dominance, but I don't think anyone deserves to get a 158 million dollar package on their way out. With so many employees in Telecom loosing their jobs, all SBC has done, is manage to squash the competition and reduce the market place.

I am just sick of this corporate greed.... no corporate executive deserves to make this kind of money and especially not when they are on their way out the door!

Phone Card Commercial - Week3 - Viva Mexico

The commercial is a low budget one done for TV in the Huston area but I thought it was still very well done considering the low budget.

New Sponsor - PinlessWorld.com

Hi everyone, I am happy to announce that I just received a new sponsor Pinlessworld.com.

PinlessWorld provides prepaid phone cards, wireless refill products as well as ringtones. Please pay them a visit and see what they have to offer.

http://www.pinlessworld.com/

Sponsors like them help me keep providing all of you the up to date content and gossip from around the industry.

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

Tax Refunds for Phone Card Retailers

With tax time upon us, just wanted to make sure that those of you who have not yet filed, be sure to use the Federal Excise tax credit.

While every home user qualifies for a credit on their post paid telephone services, prepaid card Excise tax was always the responsibility of either the carrier or the retailer, so therefore they can qualify for a refund. As long as the phone card was not restricted to local-only service, the retailer or service privider is eligible to request the refund.

The government stopped the LD excise tax (3%) last August after a federal court decisions stated that the tax does not apply to long distance service anymore as it was dated. The IRS also authorized a one-time refund of the 3 percent federal excise tax collected on service billed during the previous 41 months, stretching from the beginning of March 2003 to the end of July 2006.

Businesses request the refund by filling out Form 8913, Credit for Federal Telephone Excise Tax Paid, and attaching it to their regular income-tax return. More information on the refund is available in the “Telephone Excise Tax Refund” section on the front page of IRS.gov.

Oblio Telecom

I always new about Oblio Telecom but I never new they were a sub company within a larger corporation called Titan Global Holdings, Inc.

From what I can see Titan owns Oblio as well as StarTalk, Titan Wireless Communications, Pinless, and a circuit board manufacturing company, Titan TCB, that does work for the Military. They claim to be the second largest publicly traded prepaid company behind IDT and from my estimation they are probably the second or third major player in the phone card market behind IDT and maybe STI.

Also of note, their mobile offering has service provided by Sprint.

I know this is not really news but I thought I would share this information as it does not seem to be common knowledge.

IDT Settles with Locus and Dollar Phone

Looks like IDT's big lawsuit drama is coming closer to resolution as two of the bigger players agreed to settle with IDT this week. Those two companies are Locus Telecommunications, Inc. and Dollar Phone Corp.

The terms of the settlement seem to be very simple... all parties agreed to provide the customers with the minutes advertised. No money was involved in this settlement.

Now the only hold outs are STI Phonecard, Inc., VOIP Enterprises Inc., Find & Focus Abilities Inc., and of course CVT Prepaid solutions Inc.

Phone Cards - A Little Bit of History

I always get asked the question, how long has the prepaid calling card business been around and who invented it so I thought I would give a brief history to help shed some light on this little known subject.

The first phone card was introduced in Italy in 1976 by a pay phone operator, SIDA, who created a mag stripe card to use in their phones instead of change. Pay phones were being broken open by thieves and the company needed to find a way to reduce this problem.

Phone cards floated around Europe for years but did not come to the United States until World Telecom Group introduced them in 1987. Distributed by GE and Siemens they were mag stripe cards and did not see much mass distribution. It was not until AT&T introduced their own calling card in 1989 that the product really started to hit the mainstream market.

A year later NY Bell released their own calling card that was the first of it's kind in the US where the user dialed an access number and entered the pin printed on the card (turned out to be the most popular form of calling card). Over the next few years all of the major telecom companies followed suit and released their own cards.

By 1993 the calling card market in the US was generating 25 million annually and most of the companies by this time had dropped the mag stripe technology and switched to the access number and pin format. Two years later (1995) the phone card business in the US had grown to a 650 million dollar business and by the close of 2000 it was around a 3 billion.

The end of the 90s brought about most of the smaller companies but with the decline in the domestic market brought about by the surge in the cellular phone business, many of these smaller companies could not survive and most were gone by 2003 and 2004.

The market continues today and while more ethnically focused than before continues to bring in billions of dollars a year.

What is the Future of Prepaid Phone Cards?

While most of us will no doubt agree the prepaid phone card boom is well behind us, but the real question now is what kind of future does the prepaid card business hold?

The answer, seems to be clear by the fact that the once powerful companies, like UTA and STI are just not doing well. Sales of prepaid cards are at an all time low and I think the market was just so badly managed and abused that the customers are more willing to try other methods of long distance calling, like with prepaid cellular phone, VOIP services (Skype/Vonage) as well as traditional long distance.

The idea that the average prepaid phone card customer is credit challenged and prefers cash business is changing and more and more immigrants are either becoming more credit enabled or now have the means, through prepaid cash cards and other debit systems, to buy more mainstream services.

Immigrant consumers are more educated and technology savvy than they were 5 years ago and the rates that Ma Bell and VOIP players are offering today are so low that it is almost no wonder why a lot of people are turning away from phone cards.

What do you think?

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 EPANA Reach Settlement

In a update to an earlier posting, EPANA, one of the companies named in IDTs lawsuit against the whole prepaid industry, has settled with IDT and has agreed to join forces in helping clean up the prepaid calling card business.

To read all of the details about the settlement go to: http://www.tmcnet.com/usubmit/2007/03/20/2431901.htm

On the other extreme, CVT Prepaid Solutions is standing firm agianst this lawsuit and claiming that they do not engage in such practices and have nothing to hide.

http://biz.yahoo.com/prnews/070319/nym119.html?.v=59

OK so two have made there stance clear and now we have to wait to see about all of the rest of the named parties.

This is turning out to be the most action we have seen in the prepaid calling card business in years!

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.

BaTelCo Cracks Down on Retailers Selling Phone Cards Below Cost

In America, we are all used to seeing phone cards being sold at below face value and is generally an accepted practice in the service providers eyes but it Looks like in the Bahamas the main service provider is not going to allow this practice.

The Bahamas Telecommunications Company (BaTelCo) has just started a big crack down on retailers selling their $20 cards for below cost (sometimes $19 or even $18). The reason, at least their reason, is that they want to provide a level playing field for all distributors and retailers so that all make the margins they should.

Definitely not a free market economy business practice and in the end the consumer just ends up being the only one who loses.

You can read more about this story at http://freeport.nassauguardian.net/national_local/333690256373958.php

Around The Web - Prepaid Telecom Sites

Being that prepaid telecom is such a niche subject I thought I would help everyone out by sharing some of the web sites I know that deal with the subject:

www.intelecardnews.com - Print and Web publication about the prepaid calling card, mobile and debit industry

www.phoneplusmag.com - Print and Web publication about with regular coverage on everything relating to telecom, including prepaid products

www.prepaid-press.com - Web site with news and information about anything prepaid

www.drprepaid.com - A nice site with news and info on the prepaid mobile buisness

www.cardweb.com - Web site and print publication on the prepaid debit and credit card industry

http://www.prepaidgrapevine.com/ - Prepaid mobile and calling card forum

If anyone knows of any other sites relating to prepaid business please feel free to post a reply to this post.

Phone Card Graphic Designer Starts Her Own Business

One of the best freelance phone card graphic designers, Liz Broes, has decided to start up her own business and asked me if I would give her plug.

I had used her in the past to design a few cards, posters and trade show materials and was always pleased with the work, so I have no problem recommending her to everyone.

Her company is called Em Dash Design and you can visit their website at www.emdashdesign.ca

If you are looking to take your product to a more professional look and feel, I strongly recommend using her graphic designer services.

She can be reached via email at studio@emdashdesign.ca or by phone at 1-514-499-3336

Locus Telecomunicaions puts Latin Singer Toby Love on Card

The Toby Love calling card has just been introduced by Locus and marks the first time that company uses a latin celebrity on one of their prepaid calling cards. This move is an effort for Locus to gain more of a presence in the highly competitive latin calling card market.

Toby Love is a popular latin recording artist.

Blackstone Fined for Failure to Register and Pay Regulatory Fees

Looks like Blackstone has been slapped with a $20,000 fine for failure to register with the FCC and pay the appropriate USF fees. The Bureau is claiming they have made repeated requests of Blackstone to get in line and register but have received no response from Blackstone and no cooperation.

It seems as if Blackstone is just not responding at all since they feel they are not a service provider, just a calling card distributor, so therefore there is no need to file. I am not sure if Blackstone is an actual carrier, but I am sure, like many other prepaid calling card distributors, they have made claims as such to their end users (common practice). So if they want to make the claim, regardless of true or not, they need to pay the piper!

While the $20,000 fine may not look like a lot, the amount was actualy increased significantly from the base fine for this type of infraction due to Blackstone's complete lack of response or cooperation with the Bureau.

Prepaid Mobile Gaining Momentum with Teens

It seems as if the fastest growing segment of the prepaid mobile phone business is the teen market. Parents who were once buying regular post paid accounts for their kids are now switching over to the prepaid concept to help them control their kids usage which many a times can easily get out of control!

Ethnic markets were long seen as the main consumers of prepaid mobile phones due to their lack of established credit, the teen market is taking the industry by storm and accounting for the larger piece of growth in the industry.

FCC Lays Down USF on Prepaid Calling Card Companies

Looks like most calling card and VoIP companies are now having to scramble to get in compliance with new laws requiring them to collect Universal Service Fund (USF) fees from all users. VoIP users will se it in additional fees on their monthly phone bill but calling card users will not see it directly as most providers will just build it into the rates. Where end users will notice it, is with less competitive per minute rates.

I guess it's only fair since Ma Bell has been having to collect these fees forever but in the end it just means less minutes for the money.

Taking Stock of Which Prepaid Distributors are Still Around

Just thought I would do a quick run down of the prepaid calling card distributors still left:

Raza Communications
Millenium Telecard
TeleCenter, Inc.
Blackstone
Union Telecard Alliance
SDI
Reliablecom
9278
Touch Tell Comm
DR Phone

I know I am probably missing a few, and I appologize to those I left out... feel free to post a comment if you see a distributor not listed here.

Remember, I am only listing phone card distributors here, not providers. I classify a distributor as a company who makes more than 50% of their income through resale of calling card products.

Chinatown in Manhattan a Phone Card Hot Bed!

Who says phone cards are dead???

Estimates are that over $300,000 in phone cards are sold in Manhattan's Chinatown alone, making it one of the largest prepaid calling card markets by size. The flip side to this is that most calling cards sold here go for much less than face value. For example a $20 card, wich is the most popular denomination for the Chinese American community, sells for anywhere from $12 to $15 retail. But if you are looking to increase your international calling cards sales this is a great place to do that!

Columbia Mobile Rates Go Up

You may have noticed that the Columbia Mobile rates on most services have gone up considerably lately. This past month most have increased a full $0.05 per minute! I have been unable to find any reasons why! No new regulatory issues that I can find which would explain the large increase but nevertheless, expect to pay more for calls to Columbia Mobile.

AT&T to Up It's Donations of Phone Cards to Military Members

At&t which reportedly has given out over 60,000 phone card to military personnel stationed overseas will up it's contribution in 2007 to even more. Estimates are that they will give out upwards of 75,000 free phone cards this year to members stationed all over the over the world. At&t is also the main provider of calling facilities at military bases so this is a natural fit and they also make a considerable amount of money off these calling centers so it is the least they can do to give back just a little!

UnionTelecard.com Receives a Face Lift

The perennial super power in the prepaid calling card business just launched it's newly redesigned Uniontelecard.com which features less product selection but all cards are now fully rechargeable and feature pin less dialing. They no doubt realized that most of their cards were not suitable for the online consumer and decided to limit it to about 8 cards.

This new web site design and focus on rechargeable cards now make Union Telecard Alliance one of the most powerful online retailer of phone cards.

Calls Made to Mexico Celluar Phones Go Way Up!

The Mexican government just passed a law to increase the cost of calls made to mobile phones significantly. The bill requires all calls made to a cell phone in Mexico to rise by 14 cents a minute. Both callers in Mexico and callers outside Mexico will have to pay the additional fee making for one of the biggest fare hikes in recent telecom history.

Now Mexico comes into line with many other countries, who charge the calling party significantly more for calls made to mobile phones. The US and a handfull of other countries are the only ones who don't charge a different rate for calls made into mobile phones.

The effective retail rate for most companies will be around $0.31 a minute to complete calls to Mexico Mobile.

Woman Paid Over $14,000 for Two Rotary Phones

I just read an interesting article from the Canton Repository (www.cantonrep.com) where it was found out that a woman, now 82 years old, was paying $30 a month to lease two rotary phones from her phone company (At&t). She first got the phones in 1962 and had kept them ever since until her granddaughters discovered exactly how much she was paying and put a stop to it. While leasing a phone was common up until the late 80s, the technology has become so inexpensive that leasing just doesn't happen much anymore. At&T/Lucent claims they still have over 750,000 customers renting phones from them, far less than the 4 million back in the 80s but many now wonder how many of those 750k are elderly citizens who just don't realize that you can buy a phone outright for far less. Is this considered taking advantage of the elderly?

When her granddaughters called up to complain they were told she needed to return the two rotary phones in order for the monthly payments to stop. They did so but their grandmother was a little disappointed that she had to give up two phones that had been fixtures in her home for 42 years. Long story short, they should have let her at least keep the phones... I think she more than paid them off!

Countdown to WorldCom CEO Ebbers Going to Jail

Well it looks like Bernie Ebbers, famed WorldCom CEO, is enjoying his last days as a free man. He has to report to Jail as of Sept. 26, 2006 to begin serving his 25 year sentence for accounting fraud.

While you can't help feel bad that this man will be locked up most likely for the rest of his life, I still feel like he deserves it. Maybe he is just being made out as an example just like Martha was a few years ago, but the reality is corporate corruption on this scale has to be treated as a major crime... REMEMBER... This is not a victimeless crime. How many peoples lives were ruined and futures devastated by his shameless practices.

It has too long been considered as a no big deal type of crime and now we need to let people know that these kind of accounting scams all for the sake of stock prices is grand theft larceny and people that engage in it should be tried the same as someone who robs a bank.

While I will acknowledge it can be a fine line to walk between staying on the right side of things in a big corporate environment, I still believe we need to do our best in keeping big business honest.

DMOZ a Forgotten Wasteland?

I noticed that the Telecommunications section of DMOZ.com has not been updated with new listings for some time and contains many old listings which are no longer relevant. I understand that DMOZ utilizes "strict" guidelines for its listings but I have yet to get any one of the sites I work with listed! I have been working with some telecommunications companies that have websites dating back to the late 90s and are very reputable... Yet none have been listed!!

Seems like they don't much care about staying current....

Not sure who the editors of this category are but it seems as if those involved (most likely telecom professionals) are selfishly trying to protect their websites from the competition. I have listings on all of the other major directories like Yahoo, BOTW, Joeant, business.com and so many more but yet can't get three sites listed after two years of waiting for the editors of DMOZ to give me a listing. DMOZ better shape up and change their strategy or risk being left out in the cold in the fast changing internet landscape!

Oblio Lands a Deal with Sprint

First it was At&T and now Oblio Telecom has landed Sprint as a carrier for just about their whole product line. They will launch 25 calling cards within the coming weeks and will no doubt cause quite a stir in the prepaid industry. I am not sure if they are going to port over their popular cards like Picante and others to Sprint or create all new ones, but I would imagine they are going to do both. I wonder which one of the two companies got the better deal? Hopeful Sprint learned from MCIs big mistake a few years back with 9278 and isn't giving away the kitchen sink!

FiOS TV Service from Verizon - FiOS

I had heard about Verizon wanting to get into the Cable TV industry but I just recently heard that their fiber TV service, FiOS, is up and running in one small test market in Texas and they are working diligently to get it out across the country.... And the price tag, you won't believe this, $700 to $1,000 per household... WOW!!!

Hey if they are willing to spend that much, it can't be half bad! I will pick it up when it comes to my area as my current provider is cleaning out my pocket each and every month. Competition may not be good for the likes of Comcast and Time Warner but it will mean great savings for us the consumer!

FYI - Comcast and other big cable companies are doing everything they can to stop Verizon so be prepared to wait awhile until the legal battles are over before you see this in your neck of the woods.

AT&T Has to Pay Up!

It seems as if AT&T has finally lost the battle in trying not to pay the USF charges. For sometime now they have been claiming that these cards are "information services" since they contained advertising and thus were not subject to the USF charge. Well today the FCC dug in its heels and announced that AT&T had to pay up! I am sure new owner SBC is loving this great inheritance... Surely they new this was coming. Don't worry they will find a way to make us everyday customers pay for it with a "we are stupid" type of tax on local and long distance services.

In other news related to this judgment, all carriers claiming they are exempt from the USF since they carry calls over a VOIP network, now have to pay the fee as well. No more hiding behind the VOIP thing, especially if their network only has limited usage of VOIP. There is still some grey areas as it relates to 100% pure VOIP carriers. This should be interesting for the lawyers from the big VOIP companies like Net2Phone, Vonage and Ibasis.

Lawsuits A Plenty!

Did I miss the memo or something? In a little less than two weeks all of these patent lawsuits just appeared in the VoIP industry.

1) Net2Phone is suing Skype for patent infrigement (like Al Gore, Net2Phone is claiming that they invented the internet and VOIP)

2) Verizon is suing Vonage for patent infringement (they just don't like Vonage stealing all of their customers and want them to close up shop)

3) Rates Technology Inc. Is suing Google Talk for patent infrigement (something about a routing technology Google uses)

I think it is just a coincidence that all of the players being sued in the VOIP world have deep pockets and lots to loose. A year ago you couldn't sue anyone as nobody had money and those that did have a bit would have just shut their doors rather than give the money away in a frivolous lawsuit.

Well at least the lawyers will make money out of these lawsuits!

Vonage IPO

I know Vonage was looking for buyers for some time and since they could not find anyone willing to pay their price they went with plan B, going public. This month they did their IPO and shares started selling at $17 and then fell drastically within hours.

It looks like their share prices were overvalued at opening and as a result fell to levels investors felt were more adequate for the company. The real issue is are these stocks really worth over $10 a share... Better yet are they worth over $5? Vonage is known to be a very non-profitable entity spending millions and millions of dollars to acquire customers. AOL used to do this way back when and on average it took AOL 2 years on each customer before they started making a profit on that individual and now Vonage has been trying the same thing. They were never worried about profitability and a good ROI, all they wanted was a huge customer base so they could sell their business to investors based on that alone.

Problem is anyone who was to buy them or invest in them realized that besides a huge customer base they would be left with a business that just sucks up cash and brings very little back to the table.

To read up further on this visit: http://www.internetnews.com/bus-news/article.php/3611221

InteleCard News - Oh How the Mighty Have Fallen

I just received the latest issue of the InteleCard News magazine and all I can say is that my weekly A&P circular is bigger than this magazine! The once dominant magazine for the prepaid community, like the industry, is definitely a shadow of its former self. They can't even squeeze out 100 pages anymore, and a good portion of the ad space was used by them trying to sell everyone on buying ads in the magazine.

While I was never a huge fan of the magazine as it's content was determined by those companies that contributed the most in advertising dollars, I think this magazine was once one of the determining factors in a companies success or failure. Now it just seems like the industry has passed this publication by... Surviving mostly on ads from prepaid wireless companies, the reality is that this industry is not big enough to keep this publication going. If it was not for their two shows still selling good amounts of booths, I think this magazine would have been history already.

The shows still seem to attract enough exhibitors but I have to say they are a shadow of their former self... My recommendation to the people at intelecard... Lower your ad pricing, reduce your shows to once a year and acknowledge that it just was not what it used to be! After all we in the industry have realized that and have made the adjustments accordingly.

Telefonica Phone Cards Launched in the US

I recent saw that Blackstone, a leading prepaid distributor, is now selling phone cards here in the US from Telefonica who up until now have had little presence in the US market. There seems to be a trend lately with major telecom providers from other countries getting into the US market. Blackstone also sells cards from ETB, the major telecommunications provider from Colombia, and T-Mobile, owned by Dutch Telecom.

The trend is understandable as with the prepaid phone card market going bust a few years back left very few prepaid phone card providers to handle the demand. If a distributor wanted product, they had only a few choices for who to get them from (IDT, Ibasis, VCG, Radiant, At&T and a few other smaller providers).

The reality is that the prepaid phone card business is finally going main stream where only the big boys will be able to play. This is not a bad thing and will mean better quality and less games ultimately leading to a cleaner market.

AOL Launches Phoneline Service

Well the time has come... AOL officially launched their Phoneline service on Monday and are pushing the Free service along with free phone number. Cutely referred to as "Free Digits" they are pushing the free phone number as the main selling point to this service hoping to get a lot of takers. Coupled with the fact that it will work with the existing AIM messaging software it should be a relatively easy sell.

The real question is will they get new customers because of this or will it just be something that existing users will buy into? I know profit is not the motivation for offering this service since they are giving it away for free (they do have an up scale to an unlimited plan though).

From a user perspective I think this will be a nice service and they are doing a good job with the marketing side, but I really don't think it will change AOLs bottom line or paid subscriber base much.

AOL to Give out Free Phone Numbers - What Next??

I just read the other day that AOL plans to give out free phone numbers with it's AIM service. Just like all of the other dominant players like, MSN, Yahoo, Ebay and Google, AOL now offers free VoIP calls to other AIM users. It was developed to help enhance their product and gain back valuable market share which it has been steadily loosing over the last few quarters.

While I am not a big fan of this free phone call push that has been going on lately (it is definitely going to have an adverse effect on those of us in the "Paid" long distance business), I have to draw the line on AOL giving out free phone numbers. Skype offers phone numbers but charges for them and I would have to agree that there should be a minimal charge for the phone number as we the carriers have to pay a few bucks per month just to maintain the number. AOL has basically said that they will eat the cost of the phone numbers in order to try and gain back market share... While it serves their purposes (maybe) the rest of the telecom world is now faced with a dilemma! Give the stuff away at a loss or don't do business at all!

Is it wrong to want to make money in business?

Good luck to you AOL and I hope this desperate move ends up postponing your inevitable demise.

Ethnic Marketing and Prepaid Promotional Phone Cards

Years ago you used to see big companies like Coke, Mercedes and CitiBank using promotional phone cards as part of their promotional item mix but in recent years, phone cards have been less attractive to the mass market with cell phones making domestic long distance practically free.

You will get no argument from me on staying away from phone cards as promotional items to the mass market but I think companies should seriously consider phone cards as promotional items in an ethnic marketing campaign.

Lets say you are Goya and are trying to think of a marketing strategy to build brand loyalty. Why not give a 15 or 20 minute promotional phone card to your customers as a promotion. Make the card so it gives 15 to 20 minutes to all Latin American countries and I guarantee that your customers will eat this promotion up! There are so many hot ethnic communities where this type of promotion would just plain work! Filipino, Polish, Czech, Vietnamese, Chinese, Korean, Mexicans, Ecuadorians and so many more.

If you are trying to reach one of the above ethnic communities, this will get you so much more mileage than a free sample or a t-shirt. Best of all you can gather customer information from the call records if you like...

It's a marketing strategy that will be gaining popularity and now is the time to help stand out and reward your customers with something they will love.

If you are interested just post a comment or drop me a note and I will help get you pointed in the right direction.

Getting Your Telecom Site Found on the Internet

There are so many players in the Telcom space today that it is becoming increasingly hard to get your small to mid sized company found on the world wide web. Part of my job over the past year has been helping these types of companies overcome the big boys, by making them more visible on the web.

While I can't give away all of my trade secrets to becoming more visible on the web, I thought I would at least share the basics to help get you started:

1) Identify the major trade publications for your industry and see if they have an online web directory and post your link

2) Submit your site to all of the free directories you can find. While not the greatest thing, it will help get you started.

3) Buy a handful of directory listings with the major players like joeant.com, yahoo.com and businesseek.com

4) Find other web sites in a similar industry and ask them for links (you would be supprised what many people will do for nothing in return... yes there still are some good people left in this world).

5) Trade links with others in your industry

6) Create an affiliate program with Link Share where you pay people commission for qualified sales that they bring to your site. This is great because you only pay for sales and not clicks.

7) Buy AdWords on Google and Yahoo... don't go crazy but this is a essential part of any online marketing program. These are pay per click programs so expect to pay a little more than with LinkShare since you are paying for each click on the link and not for sales.

8) Buy a few well placed banners on some major sites like yahoo. This is expensive and you pay by impressions but it can be helpful for branding.

9) Try some shopping sites like shopping.com and yahoo shopping. These are also pay per click programs but unlike the adsense programs they bring you much more targeted visitors and a better CPA.

10) Post your URL in a few subject relevant guesbooks... be careful as this can get you blacklisted by the search engines so keep it to a minimum... no more than 20 or so tops!

11) Try posting on some free online classifieds

12) Ask your friends and family with web sites to give you a link!

You don't have to follow all of these to be successful but doing some will definitely help and remember be patient it can take months for search engines to take notice of your hard work.

Good Luck!

Long Distance Options

While the international phone cards industry has taken a little bit of a hit over the last few years there is good news for consumers! Competition is the reason for this decline and variety is abundant and many great low prices.

Some of the options out there:

Residential home VOIP phone - Most offer unlimited calling local and long distance within the US and Canada for around $20 to $30 a month! Not bad compared with the $50 to $60 you would pay with Verizon

PC based calling (Skype, WebPhone) - What's better than free long distance! The catch here is that the other person needs the same client to take advantage of the free calling but considering the savings it worth trying

Calling Cards - While not as popular as they once were, the rates are still unbeatable and much of the immigrant communities still flock to these for all of their long distance calling.

Traditional Wireline - Verizon/SBC etc... tried and true but still very expensive

Cellular - Long distance in the US is a thing of the past thanks to unlimited calling in the US on many plans. It is truly braking down the barriers

10-10 services - Faded fast because of the complexity and a real knack for ripping you off with big connection fees... still an option but probably the least popular of the group.

Any way you cut it, the options for consumers are great and the prices are coming down and will no doubt continue this way for sometime!

Pick the one that is best for you and enjoy the savings.

Phone Card Collecting

It's nice to see that phone card collecting is still alive and well. While not as popular in the US, it's thriving overseas and is really something people are doing for passion rather than profit. The primary means of exchange is done mostly through one for one trades but there are a few places that sell them as well.

Collectible Phone Cards are those primarily issued by the larger telcos and are generaly collected based on a theme. Some collect phone cards with butterflies, other with Mickey mouse and some just by country. Whatever your preference there is somone out there who can offer them to you. It's a fun hobby and I would recommend people to give it a try!

A few sites to help get you started:

UK Collectable Phone Cards

Ma Bell is on her way back!

With the news this week that the new at&t (SBC/AT&T) has submitted an intent to purchase Bell South, the telecom industry is one step closer to becoming a monopoly again. While I am exagerating a bit, this is still a significant move that will secure at&t with a huge piece of the pie. It is still too early to tell if this deal will go through and if it does what the impact will be but whatever happens it is deffinately a sign that the industry is hunkering down and trying to secure their profits in what has been a horroble industry for good margin products.

All I can say is consumers look out... your telecom bills may be going up!

Top Ten Benefits to a Prepaid Phone Card

I often get asked “what is the benefit to using a prepaid phone card to make long distance calls.” Having answered this question so many times I decided that it would be beneficial to share my top ten list with everyone:

1) You will save lots of money vs. regular long distance - At&t can charge as much as $0.50 a minute to call some countries while prepaid cards usually cost about 1/3 less

2) They are portable! Ever found a time when you were at another family member’s house and needed to make a long distance phone call but felt guilty about running up your hosts phone bill? With a phone card you don't have to worry as you are now paying the bill!

3) Great for emergencies - carry a low value one with you in case you need to make an emergency call from a pay phone and have no change

4) They can be used to make long distance calls from your cell phone - Everyone knows that they will be taken to the cleaners by their cellular company if they make a long distance call outside of their plan but with a phone card you now use your cell phone to make long distance calls and not have to give up your 1st born to pay the bill

5) You can use them from your office - Many companies don't allow their employees to make long distance calls from work and in some cases they even block all non local calls. With a phone card you don't have to worry about your boss getting mad as now you can flip the bill using your prepaid phone card.

6) Perfect for traveling - No traveler should leave home without a phone card! If you are traveling internationally make sure to find a phone card with access numbers from the country to which you are traveling. A great traveler’s phone card is Net2Phone Direct

7) They can be rechargeable! Most of the phone cards with the super low rates are usually meant for one time use but you can find some good ones with low rates that can be recharged!

8) You don't need to sign up for a monthly plan to get the best rates. You can use it when, how and wherever you like!

9) Allows you to better budget your long distance calls! You can keep track of the amount you spend and limit yourself by only buying the amount you want to use! No more surprises at the end of the month where you are asking yourself why did you spend so much and if I only new it would have been this much money I would have talked a little bit less.

10) They are easy to use!

Verizon Fiber Service

I have been hearing a lot of good things about the new Verizon fiber service now available in select areas. This looks to be their answer at declining home phone service revenues and from my perspective will most likely be the savior of this company. For a decent price they will hook up a fiber connection to your house through a special batter backed up box installed in your premise that can provide phone, high speed internet and eventualy cable TV.

With the VOIP providers like Vonage and Net2Phone chipping away at Verzion's customer base and with a lot of people just choosing to have a mobile phone instead of a wire line, Verizon had to come up with a way to keep their customers and start turning many back. Their price point will be key and all indications are that the pricing will be in line with the VOIP competitors and will deffinately be lower for the cable TV portion.

Lord knows that DSL is not a viable long term internet option and with the bulk of their subscriber on the bare bones $14.99 plan, I don't see this option as sticking around lone as it is just too darn slow... it would be interesting to see what the lifetime value of a customer is for this service. Most people I know tried it because it was just such a good deal but then releazied why it was so cheap and have since switched. This fiber connectivity should be on par if not better than most cable modems and will be priced cheaper.

The future looks bright for Verizon thanks to Fiber, I only hope that they can speed up their roll out to avoid being to late to the party!

Who will be the Breakout Telecom Company in 2006?

Every year we see a lot of new telecom companies coming in to the market to take a piece of the competitive prepaid telecom landscape. While I am 100% for competition the question always arises which one of these new telecom companies will have the right business plan for success?

IP Telephony was the buzz in 2005, the year that saw Vonage as the breakout performer but 2006 looks to be much of the same, except this time it looks to be the year of the Internet Telephony enabler. Vonage managed to single handedly peak everyone's interest in the VoIP arena and now many cable and older telephony operators are rushing to catch up and cash in on the wave.

On the top of my list I see Net2Phone reclaiming their once large dominance in he VoIP world but this time with a mix of huge cable deals and on the backs of their new push back into the softphone market. The only thing that brings a question mark is the potential take over by IDT. If the take over happens it's hard to say what direction the company will go in but if IDT leaves them be I am confident that they will finaly come back to being a household name and seriously making Vonage stop, look and listen.

Other companies to watch for in 2006:

at&t = The new SBC has at lot at stake with their recent acquisition and name change and so far have come out of the gate running!

Radiant = A long time player whose time has come in the prepaid world!

Boost Mobile = With their youth oriented marketing and cool offerings they are sure to be in the lead in the year in which prepaid cellular takes off!

The New at&t is Everywhere!

Everywhere I turn lately I am being bombarded with the new at&t commercials! Online their banners are posted all over, on TV the commercials run about every hour on every major network and they are starting to appear in print now as well!

This has got to be costing them a huge amount of $$$$ and my guess would be that in about a month or so we will not hear or sear much more of them for a while. With an ad spend like this they will definitely have to go dark for a while or risk heading down the same path as the old AT&T.

I hope they didn't pay big bucks for the new logo and for having someone come up with the idea to spell out at&t in lower case letters. Still looks the same to me!

I have been a long time supporter of the old At&T, using them for my long distance and to buy phone cards but I am still a little skeptical of SBC and how much of the old AT&T burocratic mess they inherited. The reality is that AT&T became worse than government in their internal politics and processes that made it necessary for six people to approve an employee going to the bathroom and there was no way that they could turn the place into an efficient business being as large as they were. Well SBC is now in the position that they can streamline many of the areas but unfortunately by keeping the name they were no doubt forced to keep much of the burocratic mess.

All I can say is good luck SBC with becoming the new at&t and at least you picked a nice OASIS song for your TV ads.

Happy New Year

Took a little trip to celebrate the new year and just wanted to wish everyone a Happy New Year! All the best in 2006

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!

MCI and Microsoft Getting Ready to Intro Softphone

It looks as if the big power house Microsoft is about to unleash their entry into the VOIP game with a partnership with MCI. The new softphone will be meant to compliment their IM client and follows suit with similar undertakings by Yahoo and AOL.

To see the article go to http://digital-lifestyles.info/display_page.asp?section=cm&id=2857

Great Article About Phone Cards and MLB

An Interesting article I found on AOL from the New York Times which I thought would be a good read for those in the Prepaid Phone Card Business:

"For millions of foreign visitors and immigrants in New York, it has long been a lifeline to home: the prepaid phone card, costing as little as $2 at the corner bodega, good for bargain-rate international calls that are charged by the minute.

Now, in a case involving bodega owners, Major League Baseball and some of its most celebrated Hispanic players, the phone cards are the focus of charges including false advertising, overcharging and fraud.

Yesterday, at a sidewalk news conference in front of Major League Baseball's Park Avenue headquarters, the Bodega Association of the United States, a trade group, described what it called a huge swindle aimed at low-income Spanish-speaking people. The cards, which bear the photographs of baseball stars like the Mets pitcher Pedro Martínez, either do not work at all or provide far less calling time than advertised, the bodega owners say.

"The important thing for bodegas is to maintain the trust of people in our community," said Jose Fernandez, president of the association, which says it represents 7,000 bodega owners in the city and suburbs. He said the bodega owners, many of them immigrants with limited English skills, are being duped into buying the faulty cards, just as their customers are.

Besides Martínez, Mets general manager Omar Minaya; Baltimore Orioles shortstop Miguel Tejada; Los Angeles Angels outfielder Vladimir Guerrero; Boston Red Sox slugger David Ortiz; and Oakland Athletics pitcher Octavio Dotel have appeared on the cards, all in uniform, and typically captured in action on the ball field, as they might appear on a box of Wheaties.

Carmine Tiso, a spokesman for Major League Baseball, said it had not known that photos of the players, or of Minaya, had been used to promote phone cards until this week. He said the league had not approved the use of their images, which is required because league uniforms appear in the pictures. He also said the league had begun its own investigation that could lead to disciplinary action against the players.

Norman Siegel, a lawyer for the bodega owners, said an investigation into who was responsible for making and distributing the cards had not been completed. He said that tracing the production, distribution and sales of the cards might be difficult.
Spanish-speaking customers have encountered similar swindles for years, the bodega owners said, but the complaints have multiplied in recent months as the faulty phone cards with the ballplayers' pictures have begun circulating under the brand name Grandes Ligas, or big leagues.

"These ballplayers are the heroes of our community," said Anthony Miranda, chairman of the National Latino Officers Association of America, a police group, who joined the news conference.
Richard Lipsky, a spokesman for the bodega owners' group, said it was considering a lawsuit against the phone card manufacturers and distributors, perhaps also naming Major League Baseball, Mr. Minaya and the players whose photographs are on the cards as defendants. The threat of a lawsuit was reported on Monday by The New York Post.

But Mr. Siegel said yesterday that the lawsuit had been put off until the phone card problem was explored further, and in the hope that Major League Baseball would join forces with the bodega owners, providing public and financial support for the suit.
Mr. Tiso, of Major League Baseball, declined to say whether the league would aid the bodega owners. "We would prefer to have a discussion with them directly, not through the media," he said.

Mr. Siegel said his group would also urge the state attorney general, Eliot Spitzer, the Federal Trade Commission and the Justice Department to investigate.
Christine Pritchard, a spokeswoman for Mr. Spitzer, said his office would review the complaint. She said customers who thought they had been bilked by faulty phone cards should contact Mr. Spitzer's office to help it build a legal case."

Copyright © 2005 The New York Times Company written by THOMAS J. LUECK

Phone Cards for your Cell Phone!

I don't think most people realize this but using a phone card from your cell phone is possible and will save you lots of money vs making a direct dialed long distance call. International Phone Cards work from any phone, even your cell phone. I can't count the ammount of times my family members believed they had to be using their home phone to make their long distance calls. A phone is a phone, even your cell phone!

The real trick is wait until your free nights and weekends kick in (so you don't burn your minutes), grab your favorite phone card and call away!

Prediction for 2006 - Prepaid Mobile Consolidates!

My prediction for the upcoming year is that this over crowded Prepaid MVNO market will see many players drop out of the game due to decreased profit margins.

Just like prepaid phone cards, the prepaid mobile market seems to be following courese, just at a more rapid rate. Each month we see two or three new MVNOs entering the game and each trying to top the other with their offer. By the end of next year margins will have become so low that most smaller players will have to leave the market, either due to bankruptcy, buyout or just a general pull out.

This market seems to be moving at such an accelerated pace that I see the evelotion of this market happening at a much more exelerated pace than it did with phone cards. As always only the strong (finiancialy) will survive.

For customers they can look forward to one thing for sure in 2006... great rates and deals on prepaid phones and rates as all of these players compete for your business!

Prepaid Softphones?

Just a little question... I have noticed a lot of buzz lately about internet softphones like Skype, Glophone, Dialpad etc... Is this just a fad or are these products really marketable as stand alone prepaid products?

I know they have a use for the online community kind of things like Google, Yahoo and Ebay who just want to be able to add voice commnunication to their text chat.