Where Have All of the Prepaid Phone Card Customers Gone?

In this article on the prepaid phone card business, the first in a series of postings regarding the overall business and it's forcasts, we look at some of the main reasons why the phone card market has been shrinking at such an alarming rate.

1) Prepaid Wireless

For years most immigrants, had no way of getting their own phone service due to poor credit so they resorted to using phone cards from payphones to make all of their calls. Now with prepaid cellular becoming so popular (close to 40 million subscribers today), these immigrants and credit challenged people now have more convenient options for making phone calls. To date international calling still remains expensive on these prepaid cell phones but with each passing year we see more and more companies starting to lower their rates to international locations to help increase their revenues and market share numbers.

2) VOIP

Thanks to companies like Vonage, Packet 8, Skype and others, who had no interest in being profitable, home phone service and international rates were brought down to insanely low amounts that consumers would have to be foolish not to try! The good news is that with many companies in this industry going belly up or running up against financial hardships, many consumers have lost faith in this brand of calling and are looking elsewhere for solutions. The problem here is that many are not looking to phone cards as the answer!

3) Cable Companies

While technically classified as VOIP, they deserve separate mention as unlike the other VOIP players, their strategy is to make money. Their pricing is a little higher but they offer good bundling packages that makes overall monthly expenses lower, at least for the first year. By marketing to their existing base they are having tremendous success in driving up their revenues and giving the traditional LD companies a major headache!

4) Traditional LD Providers

Traditional long distance providers like At&t, Verizon, Quest and others were extremely reluctant to give up their fat cat margins but faced with declining customer bases (mostly thanks to cable companies) they have been reluctantly coming around. Today you can find many providers with unlimited international calling plans and deep discounted bucket plans. One thing to note here is that they are not actively marketing or pushing these plans but instead using them as retention tools... no need to pillage a profitable base!

All in all prepaid wireless and wireless in general is probably having the biggest impact on the calling card market and most likely will continue to be the biggest influencer in the future.

Next week I will touch on the prepaid wireless business in a little more detail!

Montel Williams Teams Up with CallingCards.com

In one of the first celebrity endorsements I have seen in the phone card business in a while (dating back to the Bollywood days), Montel Williams has created a partnership with callingcards.com to promote free calling card giveaways.

While not a high level celebrity, it should give them some good buzz and a little more website traffic!

Check out the site here....

Phone Card Commercial - Week 17

While not exactly a phone card commercial, this is a marketing piece that Nobel put together to help sell thri services. A little long but because they are a major player in the phone card business I thought they were deserving for this spot!

Intelecard Website Sucks!

Pardon the blunt title but this just has to be said... the Intelecard website used to be a great place to read some insightful articles and get business listings but if you go there today it looks like my 4 year old nephew is designing the thing! All of the images are out of whack, half the pages say under construction, and those pages that aren't under construction have about 3 words of text.

My guess is that business is not so good for them and they had to cut back on areas that are not producing enough revenue and the web is definitely one of those areas. They most likely got rid of their web designer and have someone internal doing it with little knowledge and abilities.

It's a real shame!

More Bad News For Vonage!

Less than 48 hours after the ruling against Vonage in the Sprint Nextel patent lawsuit, Vonage got more bad news in the announcement that their appeal of the Verizon 55 million dollar patent infringement suit was denied. However, they did manage a small victory in that there were originally three patents they had been found to be violating but the courts sent back one of them for further review. If they manage to get the third patent violation dismissed, they will likely only have to pay around 40 million in damages. It is also still a possibility that the amount could be changed, since the judge asked for the damages payout to be re-examined as well!

Either way Vonage is looking at paying tens of millions of dollars to Verizon and a company in their battered state would be hard pressed to survive a payout like that!

Their stocks also took a beating dropping below $1 a share for the first time ever ($0.99).

Vonage Found to be Infringing on 6 Sprint Patents

Vonage just lost a patent infringement case brought by Sprint/Nextel. The lawsuit claimed that Vonage had knowingly used technology that was patented by Sprint - Nextel and the court agreed finding Vonage liable for approximately $69.5 million (5% of Vonage's revenues during the time period). Vonage plans to appeal the ruling but has already started on workarounds on the technology in question.

This marks the second major loss in court by Vonage this year , loosing a similar patent infringement case to Verizon (they are still appealing that multi million dollar verdict against them). The news just can't be good for them and their long term survival.

Their stock price fell by 33% today on the news of this loss (started at $1.99 per share and ended at $1.20 per share). If Vonage is forced to pay either of these amounts, the company will no doubt have to file for bankruptcy protection.

Women Fights Verizon Over Charges and Wins!

A women of Indian decent living in Florida was very surprised one day when she received a bill from Verizon for $590 for calls to India, Colorado and New Jersey. For the two years she has been living in the US, she has been using one particular calling card ("Mother India") to make all of her long distance calls. Verizon claims she absolutely made these calls but she fought back and said she didn't use them and there was no way she could make a mistake since she had been using the same access number for two years. Plus the woman says the Colorado and New Jersey calls prove this bill is false since they don't know anyone in those states.

She made many calls to Verzion customer service but go nowhere until she finally contacted a media outlet in south Florida. As soon as the media outlet contacted them they credited her account for those disputed calls.

Not saying this women is lying but having been in this business for a while, I can't tell you how many times I heard people calling into the calling card customer service department saying that their local phone company charged them for calls they made using our phone card. But 9 out of 10 times it is usually due to user error, forgetting to dial the access number and just dialing directly. It is possible that Verizon made a mistake but more possible that she made a mistake.

The full news story can be viewed at http://www.tampabays10.com/news/local/article.aspx?storyid=63720

Phone Card Commercial - Week 16

A well done foereign commercial for phone cards.

Barron's Articles Put IDTs Future in a Bad Light!

Most of us have been well aware of IDTs recent hardships as made evident through their last few quarters of poor performance but a recent Barron's article paints a desperate picture for IDTs future.

In a series of two articles this month, "A Troubled Telecom Falls Further" and "Bad Signals" Barrons has really painted a bleak picture of IDTs future. The basic premise is that while IDT has been saved by it's large cash reserve in recent years, it looks as if IDT will need to keep using that cash reserve. So much so that Barrons predicts it will run out of cash in as little as two years. It even hints that the executives are most likely not too confident in the companies future since they seem to be selling off their shares at a much more regular interval.

The articles aren't scathing and put most of the blame for IDTs problems on the rise in wireless and VOIP as the popular long distance calling methods. It also points to IDTs huge losses from its purchase of Winstar, a transaction for which they are now suing over based on false promises and bad information.

While this information should come as nothing new to industry insiders, it does place a heavy wake up call to the real future of a once dominant telecom company.

Nobel Expands It's Online Calling Card Business Into the UK

As an online calling card retailer myself, I have to say I am envious of Nobel for their recent announcement of an expansion into the UK online calling card market. Next to the US, this is probably the next biggest calling card market in the world.

Nobel will be launching the web site Nobelcom.co.uk in the coming weeks and they should have no problem replicating their US success even though the UK market is fairly well saturated. In their business it's all about online advertising and implementing a strong organic search engine strategy as well as a sound PPC campaign.

With the calling card market getting more competitive here in the US, a lot of people have turned to other products and services, like prepaid mobile, voip services and prepaid cash cards to make up for the lost phone card revenue but in my mind going outside of the US is probably the best way to expand and/or keep your business growing. Some other markets of interest for phone cards are: Canada, Australia, Italy, Belgium, France, Spain, Portugal and Germany.

Phone Card Commercial - Week 15

A strange but different commercial for the Homies phone card.

The Decline of the Pay Phone Industry

When I first started in Telecom back in the 1990s I remember when a large percentage of phone card calls were made via local pay phones but with the rise in cellular phone and the ease of acquiring one, came the demise of the pay phone industry.

According to the FCC website there were over 2 million pay phones throughout the US. Now, 10 years later, that number is half of what it once was, with a little over 1 million total pay phones still in existence. The number of calls made has also decreased dramatically from over 2.5 billion in 1997 to around 1.7 billion.

While you will still find many Mexicans and other recent immigrant groups waiting on the corner pay phones because they don't have the credit ability to qualify for a home or cellular phone, I think that with rise in popularity of prepaid mobile, many of these loyal pay phone users will switch to prepaid cell phones for all of their calling needs, leaving the pay phone operators in a much worse situation than they are in now!

One thing worth noting is that much of the decline in pay phones comes from the private pay phone operator sector with the public companies like AT&T and Verizon only making up for a smaller percentage of the decline. Today private pay phone operators make up exactly half of overall pay phones on the street.

Adult Film Company Vivid Entertainment Gets Into Prepaid

This summary is not available. Please click here to view the post.

Phone Card Commercial - Week 14

A Spansih language phone card commercial.

IDT Appoints New CFO

Only 5 months after IDT appointed Stephen Brown as the CFO, they have a change in that position yet again. Marc J. Oppenheimer is the new CFO and will be responsible for turning the wayward ship around. Former CFO Brown will continue to serve in some role in the company but obviously a huge demotion for him and most likely a reflection of the companies disatisfaction.

Oppenheimer has been a board member of IDT for several years and should intergrate smoothly into this position as a result.

Titan Global Holdings to Try and get Listed on the NASDAQ

Titan Global Holdings, the parent company of Oblio Telecom, announced today their plans to get listed on the NASDAQ. While not a sure thing to be accepted it would be a good thing for those of us in the prepaid world as we would be able to see all of Oblio's actual financials and internal goings on and hence would be able to scrutinize as closely as we do IDT. Currently Titan is listed in the OTC Bulletin Board Market but they are not subject to the intense scrutiny like a NASDAQ member has to adhere to!

Titan is a very diverse company with prepaid Oblio only being one of many different lines of business (oil, detergents and more).

One thing of interest in the press release is that they reveal that their phone card services are provided by Sprint and Level 3. I know some of you probably knew this already but it was news to me! Last I remember they were using at&t.

Titan Wireless Lands Distribution Deal with Pilot Gas Station Chain

Looks like Ttitan Wireless (Our friends from Oblio) should get a big distribution boost with it's most recent deal that will put Titan brands like Bravo Mobile, Picante Movil, and Ready Mobile into the 281 Pilot travel centers nationwide.

Pilot operates travel centers accross the US on various interstate highways. Offering gas, food and convinience stores at each rest stop location.

2007 JD Power and Associates Prepaid Wireless Customer Satisfaction Results

JD Power and Associates released their 2007 prepaid wireless customer satisfaction results yesterday and to no surprise Virgin Mobile was on top! Also this being the second year for the study, the customer satisfaction results seemed to be much improved over 2006 numbers. The reason for the improvement was mostly due to much more attractive plan offerings and better pricing.

Virgin Mobile won the top spot for the second year in a row followed by at&t GO Phone, Boost Mobile and T-Mobile To Go.

While this report mostly grades service providers based on a few key service and pricing issues it also includes a few nice industry related statistics which I thought may be of interest to everyone here:
"

• Prepaid users spend an average of $38 when purchasing additional airtime. Comparatively, the average monthly service cost for typical postpaid customers is $71.
• Prepaid customers report using 218 minutes per month, less than one-half as much as postpaid customers, who average 528 minutes per month.
• Approximately 59 percent of prepaid phones that are prepackaged with minutes are purchased from retail stores, while an additional 25 percent of customers report purchasing a prepackaged phone via the Internet. Approximately 16 percent of customers purchase activated minutes cards separately from their cell phones.
• The percentage of prepaid customers who use a card provided by their local retailer to purchase additional airtime minutes is equal to the percentage of customers who use the provider's Web site to do so
• 36 percent. Thirteen percent of prepaid customers use their handsets to purchase additional minutes in 2007, which has increased from 10 percent in 2006."

To read more about the survey and read the whole piece from the above quote, go to JD Power web site

IDT Looses Appeal on Lawsuit by Former Executive

This news is a little old (I must have missed this one) but I thought everyone here might find it interesting. Alfred West, the current President & CEO of Xchange Telecom, Inc., had originally filed suit against IDT for what he claims was a breach of contract when he was forced out after only 6 months of employment (Feb 2001 to August 2001). West presented a handwritten agreement that he had signed by Howard Jonas which was reportedly to guarantee him 15 million over the life of the deal (you have to read the court document to see the insane amount of cash and it's breakdown).

It appears as if West, a former executive at Econophone and Viatel was given the promise of emplyment in exhange for brinign his contacts and much of the Viatel buisness and property rights on board. From what IDT contended, Wright falsely promised the rights to things he did not have any ownership of so therefore they let him walk and was the preliminary defense IDT used.

The original decision was in favor of IDT claiming that he did not have sufficient right to be paid the remaining un-worked period of the contract but a court of appeals has just overturned this decision and sided in favor of Mr. West.

If all stands up IDT will be forced to pay up! Only took 5 years for this guy to get through the lawsuits but I guess it's worth it for 15 million!

To view the full court of appeals document click here

Phone Card Commercial - Week 13

Here is a Mexican commercial for the Buena calling card. Slightly higher production value than what we are used to in the US for calling card advertisements.

Charter Announces New Calling Card and Phone Card Industry Gets Bashed at the Same Time!

Just read a story in the St Louis Post-Dispatch, announcing that Charter communications is launching a pinless dial phone card in the United States which is good to see but unfortunately the angle of the story was that Charter was launching a clean card because the rest of the industry is dirty!

Just another in the long line of bad press for the prepaid calling card industry!

You can read the whole story here

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.