Do We Really Need Three Trade Shows a Year?

I was flipping through the pages of the most recent issue of the prepaid press and they are heavily promoting their very first trade show, the tppEXPO'08, to be held in Las Vegas from August 19th to August 21st of this year. There are still very details available about the show like who will be speaking and who will be sponsoring but you can keep up with the developments at the prepaid press expo website.

While I understand their motives, unseating the Intelecard folks from their domination, I just feel like this extra expo is a little odd considering we are in a fast shrinking business and should actually be looking to reduce the amount of trade shows not increase them. This extra trade show will only dilute each shows importance. I would rather have 1 big show a year where I know everyone will attend, rather than three shows where people will selectively attend.

The other strange thing here is why not pick a different venue than Vegas? Intelecard will be throwing their Expo there a month or two later... do you think people are going to want to go out to Vegas twice in two months? I for one would be too broke from the first trip!

How Many Prepaid Phone Cards Deliver Full Minutes?

In a recent study conducted by the Hispanic Institute and published in many major newspapers, 45 different phone cards were selected from a variety of companies and tested to see which ones delivered the advertised minutes. To no suprise, only one third of the cards delivered the real minutes and 7 of the cards didn't work at all. In fact 8 of the cards tested delivered less than 50% of the advertised minutes.

The cards that were tested included the following:

• Florida ($5)  Telmex Compaqero, STI Florida, Touch-Tel Hondureqa, Touch-Tel Guatemalteca, Touch-Tel Salvadoreqa, Dollar Phone Coffee Time, Dollar Phone Rey, MPTAFlorida Idol, MPTA Nine, PCI Pilot, PCI Prima and TST Si Pues
• New York ($2)  Diamond Bingo, Diamond Arenque, SDI I Love NY, Lycatel Success, Lycatel Call Me, STI World, RTG Martini, RTG Cocktail and IDT Play Ball.
• Washington, DC ($2)  IDT Boss
• Toll Free ($5)  GEO Florida

You can read the full article here

NJ General Assembly Approves Phone Card Bill S2887

New Jersey now joins Florida and New York state in the battle against the corrupt practices of the calling card industry. Senate President Richard Cody introduced Bill S2887 that would require all minutes for any phone card be available to the customer with no limitation other than deductions for allowed fees and taxes and no expiration unless clearly disclosed on the card or packaging, and advertising. Strict guidelines would have to be followed by the calling card companies in order to remain in compliance.

This bill also goes further than just targeting the phone card providers, it also targets retailers, who could be fined for knowingly selling phone cards that do not deliver "true" minutes.

The bill still requires the Governors signature and if signed by him, would take another 7 months until it takes effect.

The full article can be viewed here

Entrix Commercial for Mi Pueblo - TCN

Spanish language commercial from Telecard Network.

AT&T Go Phone Now Offers Roaming in Mexico

In an effort to better align themselves in the Mexican American market, AT&T announced that their prepaid mobile brand, GoPhone, will now allow it's users to use their phones while traveling in Mexico. The odd thing here is that they will be charging their customers $0.99 a minute for all calls made while in Mexico making renting a mobile phone in Mexico a much more cost effective option especially for heavy users. Nevertheless, it is still a good option to have for those traveling to Mexico... good job AT&T!

Union Telecard Alliance Manages VITARROZ Food Brand

I don't know if this is old news but I just learned that Union Telecard Alliance (UTA), IDT's calling card distribution company is now also managing their ethnic food service business, which includes the Hispanic food brand Vitarroz. I knew that IDT owned this company but it must be recently that they gave the management of this business over to UTA. So now you can buy phone cards and some sugar ridden orange soda at the same time :)

I suppose it makes sense considering the bulk of UTAs success comes with the Hispanic community but it seems like a little bit of a stretch for them to also try and sell grocery items.

InteleCard Expo to be Held in Edison NJ

Like most of you, I have been receiving tons of emails from InteleCard informing me about the spring expo to be held for the first time in New Jersey. While this is old news now, the actual city location is new... The expo is being held in Edison NJ which is just south of Newark. Kind of an odd location considering a lot of the prepaid companies are a little further north in NJ. I would have thought they would be doing it somewhere closer to Manhattan like Secaucus...

This show should be interesting for those of us from the North East!

New Year and New Commercials - La Leyenda from IDT

Here is a Spanish language commercial for an IDT phone card.

It's 2008!

Happy New Year Everyone!

your friends at phonecardmania.blogspot.com

Florida Public Service Commission Issues Consumer Warning on Prepaid Phone Cards

In another move against the prepaid phone card business, the Florida Public Service Commission issued a consumer warning on phone cards. The report urges buyers to beware of many prepaid phone cards which have been found to be misleading consumers and acting in ways against that of Florida public statures. These problems include:

- Some of the phone cards didn't work at all
- Some of the phone card companies were not registered with the Public Service Commission as required
- Extra unadvertised surcharges and card limitations were not always disclosed
- Access numbers for some cards' networks were continuously busy
- Some phone cards advertised no connection fees, yet charged disconnection fees, misleading consumers
- Advertised per-minute rate on some cards applied only one call. Additional calls were charged at a significantly higher rate. Also, advertised rates, in some cases, applied only to limited areas, which was not disclosed

Florida has become one of the most active states in the battle against prepaid phone cards and their questionable practices (following the Florida Attorney General warning earlier this year).

See the full article here at Florida Today

Phone Card Commercial - Week 25

A very strange but clever phone card commercial from argentina for a phone card by Convergia.

MySpace and Skype Partner

In one of the more common sense deals in the telecommunications industry, Skype has agreed to partner with MySpace to empower their huge social community to make voice calls. MySpace will be introducing a new IM client that will also have the Skype engine built in. The service has been launched in beta and should be available to the masses in early 2008.

A great move for Skype as it will allow them to tap into a new market of social community users, mostly here in the US , an area where they are extremely weak. For those of us in prepaid, we really don't have much to worry about as this youth market was not big on prepaid calling cards in the first place, so our markets should not be eroded any further by this deal. It may have a small effect on prepaid mobile consumption but I don't think anything of note... young people just love to talk on the phone anyways so I think they will just end up talking more!

Canadian Prepaid Wireless Market

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

Prepaid Mobile Demographics in Canada:

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

Provider Market Share:

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

Conclusion:

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

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

International Calling Destinations on US Phone Cards

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

Breakdown by Continent:

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

Breakdown Of Minutes Made Using US Calling Cards by Country:

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

Phone Card Commercial - Week 24

Commercial in Spanish for an IDT Phone Card.

Virgin Mobile USA Faces Class Action Lawsuit

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

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

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

CVT Prepaid Solutions Settles Lawsuit with IDT

In a private settlement reached this week, CVT Prepaid Solutions, the most outspoken company against this lawsuit, surprisingly agreed to adhere to the "true minute" program that IDT is pushing. While no details of the settlement were revealed, it is estimated that CVT will join Locus, Dollar Phone, Epana and others who have already agreed in principal to follow ethical marketing practices and promising to deliver actual advertised minutes.

To see the full article go to CNN.com

Happy Thanksgiving!

Happy Thanksgiving Everyone!

Your Friends at phonecardmania.blogspot.com

Phone Card Commercial - Week 23

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

Some Demographic Data of Interest to Phone Card Providers

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

2005 Statistics

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

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

Canadian Prepaid Calling Card Market

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

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

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

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

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

Total Call Settles with IDT

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

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

IDT Finalizes the Purcahse of It's Corporate Headquarters

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

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

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

Phone Card Commercial - Week 22

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

Intelecard Expo Comes to North East!!!

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

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

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

Phone Card Commercial - Week 21

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

IDT Shuffles Around Management Team

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

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

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

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

Quick View on US Prepaid Wireless and VOIP Markets

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

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

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

Expanding Beyond Phone Cards to Get More Business

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

Prepaid Wireless:

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

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

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

POSA:

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

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

International Mobile Phone Rentals:

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

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

International Mobile Phone Top-Up Cards:

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

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

Honorary mention:

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

Phone Card Commercial - Week 20

A Middle Eastern Calling Card commercial

Ibasis Joins the Movement Towards Cleaner Phone Cards

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

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

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

View TruePrompt Press Release

Shopping for Phone Cards Online

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

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

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

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

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

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

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

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

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

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

Phone Card Commercial - Week 19

Commercial for a Web based calling card called Calldirect.

Disney Mobile to Shut Down at the End of the Year

The Walt Disney Company announced recently that it would be suspending service on it's fledgling MVNO, Disney Mobile, effective December 31st, 2007. The brand, which was created in 2006 and was targeted towards parents of young children (safe phone that could be monitored and had GPS to track their children), just could not get up to speed fast enough in order to keep pace.

The company's lackluster sales and poor distribution are cited as the main reasons for the closure. They acknowledge that without an extensive brand building campaign they would not achieve the level of success needed to produce competitive numbers. They also claim that spending the money, while possible, would probably not be worth while in such a competitive marketplace.

The brand name and child friendly content was just not enough to compete with companies like Verizon and Sprint who were also heavily pushing kid friendly phones and were willing to spend the money to get the word out!

Truth be told it really does not look like their is much room for many MVNOs in the marketplace and the future does not look better, unless of course your company name is Virgin Mobile!

Disney Mobile runs over the Sprint network.

Phone Card Commercial - Week 18

Again not exactly a commercial but it is an interesting marketing bit put together for Blackstone and their POSA business... warning this piece is about 5 minutes long!

Jury Issues $156 million Dollar Judgement Against At&t Over Prepaid Calling Cards

A federal jury recently ruled in favor of Dallas based TGIP Inc. on their claim that At&t had used two of their patents that allowed the company to deliver point of sale activation for some of their prepaid calling cards. The lawsuit was originally filed back in March of 2006 and named At&t as well as Verizon, MCI and IDT. The later three companies settled out of court but At&t fought it all the way.

The $156 million dollar award was determined by a 4% royalty on At&ts 3.5 billion in calling card sales during the time frame in question.

While At&t is going to appeal the verdict, it seems as if this company has set the proper precedent in court to lay claim to most of the POSA technology in the market today. I guess it's the only company that actually managed to make money off POSA ;)

Ibasis and KPN Are Now One Company

Ibasis just recently announced that they have merged with Royal KPN N.V., the national carrier of the Netherlands, and that they will be taking over control of KPN's international carrier services unit in addition to receiving 55 million dollars in exchange for 40 million shares of Ibasis common stock (giving KPN a 51% stake in Ibasis).

This deal seems like an effort for KPN to outsource it's international termination infrastructure and maintenance to a more cost effective and efficient VOIP company without having to reinvent their existing TDM network.

This deal single handily moves Ibasis into the top three international carriers in the world and should lock up their position as the strongest VOIP carrier in the market today. Ibasis which has been around since 1996 is also a leading provider of prepaid calling cards here in the US.

I

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!