Colorvision Phone Card

Color Vision Phone Card commercial by SDI. This phone card mainly targets Dominicans in the United States.

Total Call The Latest Ordered To Pay Up and Be Clean!

Total Call International a leading phone card provider located in California is the latest company ordered to pay penalties and clean up their cards.

In a civil case brought by the State of California, Total Call was ordered to pay $300,000 in penalties and mandated to be monitored for the next 4 years to ensure that they no longer charge "hidden and deceptive fees" which are against the State's false advertising and unfair competition laws. In order to remain in compliance Total Call must clearly disclose all charges on it's advertising materials and the cards themselves.

In response Total Call has already started removing some fees from it's products and has begun to revise all of it's marketing materials to get into compliance.

Poor Economy Hurting the Bodegas

While there is no doubt the economic woes of this country has hurt the telecommunications business, I never once thought that the small mom and pop stores would be feeling it as hard.

According to a recent article in the Charlotte Observer small bodegas in the south that used to do quite well with their money remittance products are seeing that business almost cut in half. One store they reference in the article used to do over $4,000 a day in money remittance and is now doing only $2,000 a day. The reason for this decline is that many of the communities who had high concentrations of migrant Latino workers are seeing those migrants going home and staying home since there are just not that many jobs anymore (mostly in construction and farming).

While calling card sales have not dipped as dramatically for this store, there is no doubt that those sales are down as well since most of those people that used to use the money remittance service also purchased phone cards.

The migrant worker population is much larger in the South and Western parts of the United States so the decline is felt much more in those areas than in the Northern areas where most of the immigrants are permanent rather than temporary.

April's Poll Results - Will There Be More or Less Government Involvement in 2009

The results for April's poll have been tabulated and here they are:

We Asked:

Will Federal and Local Agencies Continue To Crack Down on The Phone Card Business?

You Answered:

Yes 14 (63%) No 8 (36%) Not Sure 0 (0%)

Special Mother's Day Boss Phone Card Commercial

IDT is running a new promo on the popular Boss card for mothers day where they are giving away tons of prizes and 5,000 dollar grand prize.

IRS Employees Spent 8.4 Million of Tax Payer Dollars on Calling Card Calls

In a recent report by the Treasury Department, it was disclosed that the IRS had issued just over 34,000 calling cards to it's employees for the purpose of making business related long distance calls (primarily for dialing into conference calls). The most disturbing part of the report is that in the period from October 2005 to April 2008 the total spend on these cards was about 8.4 million dollars. In one case it was found that 1 calling card in particular had made over $59,000 worth of calls in a one year time frame.

The abuses of these business issued calling cards is just another example of the governments total lack of controls in the way they manage their funds. The report points out that there is a glaring need for the IRS to increase their controls over the use of these government issued cards... ya think???

The sad part is the best solution that the IRS can come up with is to review these numbers quarterly for better identification of abuse and fraud rather than it's current trend of once every three years. How about reviewing who actually needs one of these cards in the first place and limiting the number of people with government issued cards into the hundreds rather than in the tens of thousands! In the modern day with low cost mobile plans, all inclusive conference services and free (or close to free) calling methods like Skype, why in the world would the IRS need to have so many calling cards circulating around?

Knowing how slow the government tend to move, it would be of no surprise if we are still seeing the same high spending a year or two from now as well!.

The service provider for these cards is AT&T

Complete details of the IRS calling card program can be found on the IRS website at http://www.irs.gov/privacy/article/0,,id=161120,00.html

Primus Telecommunications Files Chapter 11 Bankruptcy Protection

Long time telecom player, and phone card provider, Primus Telecommunications Group Inc. filed for chapter 11 bankruptcy protection this week in Delaware bankruptcy court. They had been on financial hard times the last few years and had been managing to make ends meet these last few years since their big tumble in 2006 but were no longer able to stay afloat with a huge mounting debt. Hoping to find some relief from creditors and have a chance at restructuring they finally decided to go into chapter 11. It is important to note that the company does plan to try and restructure and is not necessarily heading into chapter 7. They have given a timeline of about 120 days to complete their restructuring.

Their main businesses include carrier wholesale, phone cards (small), home VOIP service (lingo) and various other VOIP based business offerings. Their 4th quarter 2008 net revenues were reported at 203 million and close to 1 billion in liabilities. The filing did not include their separate sub business entities in Europe, Australia, Brazil, India and Canada.

NJ Division of Consumer Affairs Settles With 7 Calling Card Companies

Today the New Jersey Department of Consumer Affairs announced that seven phone card providers have agreed to a settlement in principal with the state regarding possible misleading and deceptive advertising practices (sound familiar).

Dollar Phone, IDT, STI, Total Call, Epana, CVT and Locus have all agreed to a settlement with that state that will involve the companies cleaning up their advertising practices, agreeing to three years of close monitoring, paying a 1 time $5,000 amount to the state to help cover the costs of the investigation and an additional $5,000 a year for each of the next three years to help pay the costs of monitoring (CVT will pay the initial $5,000 but not the additional $5,000 a year since they are no longer operating an active calling card business).

I am now left wondering how many other states are going to take the phone card business down the same path? Are we going to see all 50 states go sown this same path?

To view more details about the settlement visit: http://www.consumeraffairs.com/news04/2009/03/nj_calling_cards.html

My Friend Phone Card Mexico Commerial

Cute commercial for an SDI card.

Comcast Now The Third Largest Home Phone Service Provider in US

It took just less than three years for Comcast to become the third largest home phone service provider in the US, overtaking Quest Communications and just behind Verizon and at&t.

Comcast service is available in 39 states and they currently claim to have 6.47 million subscribers. Their success comes no doubt from their ability to bundle the phone service with their existing cable TV and Internet service base.

Unlike their competitors at&t, Verizon and Quest, who are losing subscribers at an astounding pace, Comcast is still expected to see subscriber growth in the coming years as they continue to push the high savings that comes with their bundled service options. However it is unlikely that Comcast will pass either Verizon or at&t anytime soon as both companies still have in excess of 20 million subscribers each.

Verizon has been fighting back recently with their fiber optic offer (FIOS) which aims to not only slow the churn of home phone service customers but looks to gain new business in the Cable TV market.

Poll Results - Which Phone Card Provider Will Do Best in 2009?

The poll results are in and here is how all of you voted on the question of "Which Phone Card Provider Will Do Best in 2009?"

62% of respondents said STI will do best in 2009
12% of respondents said IDT would do best
10% of respondents daid Locus would be better
8% of respondents said Total Call would end up as the top performer
6% of respondents said Ibasis would do best

There is no doubt that STIs recent pick up of CVT puts them in the best position for 2009 but I wouldn't count out IDT, who still controls a very slight lead in market share. While all of these companies know how to do the tried and true, the leader will be the one that branches out and adds new products to their mix like international mobile top up, prepaid mobile, and money remittance.

Richard Allen Harding Passes Away

I was saddened to learn that last month Richard Allen Harding had passed away. Richard had been in the telecommunications business since the early 80s and became most well known to us in the prepaid industry through his roles as Chief Operations Officer for 9278, Chairman of the now defunct International Prepaid Communications Association (IPCA) and most recently as President of his own company Giraffe Communications.

While I never new Richard on a personal level, I did have the opportunity to meet and discuss with him a few times at the various InteleCard Expos. He was a very tall guy and heavy in stature and was intimidating but after having met and spoke with him I had realized that his size was not representative of his personality. He seemed very kind and genuine. He will be greatly missed in this industry!

Richard was 57 years old and passed after a brief battle with a yet unknown illness.

King City DMV Phone Card Commercial

Here is a commercial for the King City DMV prepaid calling card.

IDT Announces Move To Smaller Headquarters

After years of downsizing it's number of employees, IDT announced today that they will be downsizing their square footage as well.

According to their press release, sometime within the next 90 days, the company will relocate it's headquarters, currently located at 520 Broad Street (former headquarters of Mutual Benefit Life Insurance Company) down the street to the smaller 550 Broad Street building. The move, according to IDT Chairman Howard Jonas, is a cost savings measure aimed at reducing costs: “We have fewer employees than we did several years ago, and, as a result, we now use considerably less corporate office space. Consequently, we have decided to consolidate our operations into a more cost effective facility.” The company has less than 600 employees left at the location and the cost to maintain the roughly 200,000 square foot building alone exceeds 5 million annually.

IDT moved to Newark back in 2000 when it outgrew their smaller Hackensack location. Lured by lucrative tax breaks by local and state agencies, the IDT buildings giant American flag became a fixture in the Newark skyline for almost a decade. Recently the company began looking for new tenants to occupy many of it's now empty floors but the challenge of renting in Newark has proved a daunting task with many surrounding buildings also half empty and desperate for tenants.

According to the Star Ledger the building, which is owned by an affiliate company, will most likely go into foreclosure but Howard Jonas said it will try and work something out with the lenders.

Virgin Mobile USA Plan of Compliance Accepted by NYSE

Virgin Mobile USA, once touted as the shinning star of the MVNO industry, fell below the $1 a share mark back in December and as a result received notice from the NYSE that it would be delisted for failing to meet the minimum requirement of a share price of $1. In order to remain listed, Virgin submitted a plan of compliance to the NYSE on Demeber 24th.

Just this past week the NYSE had announced that it had accepted Virgin Mobile's plan and that they would receive until May of this year to bring their stock price back above the $1 a share mark. Their shares have been hovering around $0.80 since the beginning of the year but the 4th quarter earnings will be released on March 3rd and that should give an indication if they will be able to remain a publicly traded company or not!

If Virgin should for some reason end up being delisted, it is by no means an end for the company but it will be tough for Virgin to continue to operate at the levels they had been in years past. They have already implemented staff reductions and will no doubt have to continue to cut back if they can't remain listed.

Locus Telecommunications Agrees to Settlement in Phone Card Class Action Suit

Locus Telecommunications, Inc. announced last week that they had agreed to a settlement in a national class action settlement suit brought against them in New Jersey Court. In the lawsuit, plaintiffs alleged that Locus distributed or sold prepaid and rechargeable calling cards without fully disclosing the applicable rates and charges associated with those cards. While Locus did not admit to any wrong doings, they did agree to settle this claim.

Locus agreed to provide $3,663,520 of replacement pins to eligible consumers in the form of a replacement pin with a value of $0.50 each ($0.10 a minute to US and $0.25 a minute to certain international destinations). For each $5 card purchased, consumers are entitled to 1 $0.50 pin. The kicker here is that the customer must have their original pin in order to claim more than 1 replacement pin. Customers wishing to receive the replacement pin(s), must make a request within 6 months from the date of the settlement and can do so by visiting the following web site.

In addition to the replacement pins, Locus agreed to donate $300,000 to charity and agreed to use another $200,000 in product discounts in the upcoming months. IDT had a similar suit which they settled in much the same way a few years back.

Hot Dog Prepaid Phone Card TV Commercial

Here is a commercial for the Hot Dog Phone Card from SDI.

Locus Telecommunications Inks A Deal With Best Buy

Locus Telecommunications announced last week that it has signed a deal with Best Buy to sell it's prepaid wireless Universal SIMcards and recharge cards, branded O2 Wireless, at all Best Buy locations throughout the USA.

"With this new O2 Wireless service, cost-conscience consumers can ditch their expensive cell phone contracts and purchase as much or as little airtime they want."

The SIM cards work with any unlocked GSM phone and is ideal for business traveler and students who do not need the heavy cost of monthly plans and want something for which they only have to pay for what they use! O2Wireless also has a very significant coverage area supporting all major metro areas and much of the East Coast and West Coast (they do not have much coverage in the Midwest.

This deal is sure to be huge for Locus as it will give their MVNO business a huge amount of eyeballs which is relatively hard in todays comepetitve landscape.

IDT Posts It's First Quarter 09 Results

IDT just announced their Q1 09 results yesterday and the results were as expected! The company is still seeing overall loses but at a much reduced rate than in previous quarters largely because they have paid out most of their outstanding debt to the IRS, severance packages etc.... They have also significantly reduced their operational expenses by streamlining their work force and working on Network efficiencies.

They seemed optimistic about the prepaid pone card business in the United States claiming that their legal actions against unfair marketing practices have helped turn the tide in their business and are seeing steadier numbers now.

Overall I won't bore you with all of the financial results (if you want to see them please view their official release) but the long and short of it is that IDT is still continuing to dump unprofitable business units and is seemingly just in survival mode right now! Other than Zedge, and Shale Oil they don't appear to be working on any long term new business strategies and as a result the stock prices didn't go up too much on the news of their results. Investors want to see the possibility for long term growth, but IDT seems to be in short term survival mode at this point and it is clearly visible.

Survival mode is not necessarily a bad thing, as IDT needs to get its core business's act together, and most importantly profitable, before it can go out and spend money on long term strategies. It looks like IDT still has a few quarters to go before it sees true operational profitability but at least it is a step in the right direction.

CVT Prepaid Begins Winding Down

I heard through the grapevine that CVT has starting laying off employees and is beginning the process of integrating into the STI platform. All of their new cards will most likely be created on the STI platform and a migration of pins will most likely take place sometime down the road as well.

The writing was on the wall when STI purchased CVT almost two months ago. It just made no economic sense to maintain and manage two platforms that served the same function. To STI the biggest value in acquiring CVT was in the brand name and removing a major competitor. While I'm sure STI will keep some of the CVT employees, the reality is that they probably won't keep that many as most will be redundant.

It will be interesting to watch how this whole process unfolds and to see how STI will treat the CVT brand name.