The Prepaid Press - September 15, 2008 - (Page 16)

CALLING CARDS September 15 · 2008 - 16 Dateline Expo: By Gene Retske Prepaid Calling Card Update 2008 The waves of change and regulation that have washed over the prepaid calling card industry in 2008 have profoundly changed the industry, now and for the future. Gone are the days when an enterprising businessperson could identify a market, and independently produce and distribute a prepaid calling card easily and without much planning. The complexity of designing and implementing a technical operation, the morass of regulations, laws and requirements make an unassisted run in prepaid calling cards unfeasible. There are other factors that are impacting the prepaid calling card market, factors that are generally beyond the capability of service providers to overcome. Market saturation, an increase in the use of wireless services with long distance included and competitive pressures have reduced the growth rates in prepaid calling cards to low single digits, according to several Expo speakers. This may be a best case assessment, since other studies suggest that revenues and traffic are decreasing for the foreseeable future. But, despite the pallor that has settled over the industry, there are still ample opportunities for those who have the wits and dedication to exploit them. Many of these industry bright lights were gathered at The Prepaid Press Expo 2008 at Caesars Palace in Las Vegas, August 19-21. What emerged was a positive feeling that although the industry has changed and matured, there is still a fertile ground for those who can work with the complexities. Let’s take a look at a few examples we saw. marketing techniques and new markets, ready for those who can see and benefit from them. Tom Regan, Manager of Sales Engineering of Pactolus Communications Software, set the stage, picking up on the Roman Forum theme of the show. Regan said that it was Vision, Leadership, Strength and Vigilance that made the Roman Empire great. To build a prepaid empire, Regan suggests that companies focus on these same values. “These are all lessons we can bring here today,” offered Regan. He said that there are numerous opportunities for building opportunities in prepaid by concentrating on the fundamentals. Industry veteran Len Bittner, President of Maverick Telecom, provided a case study of an application that is being exploited by some calling card companies, including his own. Bittner Len Bittner emphasized the imMaverick Telecom portance of building a business plan that is designed to leverage their core competencies. “It’s hard to be everything to everyone in the prepaid calling card business,” Bittner observed. “you’ve really got to focus; it’s so competitive out there. If you are trying to be everything to everyone, you end up focused on price.” Bittner found a niche in “PINless” services, because of the similarity to calling cards. The only difference is that the ANI is used to identify the subscriber, instead of the user having to enter a PIN. Bittner has found that PINless services are “stickier,” and less subject to churn than calling cards. Pete Pattullo, CEO of NetworkIP, echoed the need to focus on core skills and to execute flawlessly. He extorted the audience to beware of false promises and gimmicks and focus instead on reliability and quality, elements he said were essential to building a name brand that would engender consumer loyalty. Brand loyalty, according to Pattullo, is the key to enhanced margins and lower marketing costs, and enables a simpler marketing message to the consumer. “Make it simple and make it about the product,” said Fusaro-Norton, a NetworkIP client. The Exhibit Hall and Conference brimmed with new ideas, new products and creative marketing. Krush Communication’s “Homies” phone cards are an example of how a unique marketing twist can help sell cards. Krush says that they strive to bring an entertainment factor to the prepaid phone card. Their Homies characters are happy images of regular people across a wide range of ethnicity, race, sex and age. Krush recently received the Best New Product of the year Award from Convenience Store News Magazine, joining marketing giants like BIC, M&M and Hershey’s. Marketing There was a growing consensus amongst prepaid calling card providers that targeted, efficient marketing is the key to survival in a world where margins and volumes are under intense pressure from competition and alternate technologies, especially wireless. “The long distance segment has been cannibalized by wireless, but the ILD (International Long Distance) is growing at a much faster rate,” noted Jayesh Patel of iBasis. Patel also said that regulatory changes and pricing compression will change the way the product is marketed, Jayesh Patel, iBasis and the ethnic market opportunity is an ideal target market. Many of the successful providers stressed the importance of having the right distribution strategy. “If you are a provider, it is important to have the right distributor that will have the right relationship with the retailer,” said Lourdes FusaroNorton, VP-Sales, Viscom International. “Distributors often walk in with the same cards, so you need a point of differentiation at the point of retail for them to prefer you and your cards.” Fusaro-Norton said that having a brand is a key factor for a retailer because cards with popular appeal sell better and at higher margins. Join our team, contact us today. Agents@calldirek.com · www.calldirek.com 1866-673-4735 - 305-316-8006 Contact Paul Reyes 305-434-7078 Of Empires, and Mousetraps With the shrinking margins, low unit pricing and competitive pressures, some prepaid calling card providers are looking at new applications and fea- CallDirek® provides telecommunications services to residential and business customers in the United States and abroad. Whether it’s prepaid long distance or a telephone line via VoIP, CallDirek® provides you many services to sell, our PIN-less service allows you to throw out those phone cards, our Internet phone service is the best alternative to traditional PSTN phone line. Our products include: Pin-less prepaid long distance - Internet Phone Service (VoIP) - Prepaid wireless recharge Brand loyalty, according to Pattullo, is the key to enhanced margins and lower marketing costs, and enables a simpler marketing message to the consumer. tures that can tap into underutilized markets and profitable niches that are as yet unexplored. The Expo bristled with talk of new applications, new AGENTS & MASTER DEALERS WANTED Regulators Rule The impact of regulation, litigation and investigation on prepaid calling card products is obvious and pervasive. In an industry once noted for the ability of small entrepreneurs to start and operate a company, the complexity of federal and state regulations, reporting requirements and tax issues, have driven out all but the most stalwart independent operator. Those that are still around have, by and large, abandoned the use of their own platforms, and allied themselves with service bureaus and platform operators who can provide regulatory compliance. http://www.calldirek.com http://www.calldirek.com http://www.calldirek.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - September 15, 2008

The Prepaid Press - September 15, 2008 ISOs Hold Key to Growth in Prepaid Industry Contents From the Publisher: The Show Goes On Regulatory Rundown: Early Fall Regulatory Beat 5 Minutes With Brian Rudolph, Co-owner, Krush Communications TPPEXPO’08 Spotlight Dateline Expo: Prepaid Wireless Update 2008 Wireless in Brief MetroPCS Available at Best Buy Western Capital Resources Inc. to Acquire PQH, Inc. TracFone Launches SafeLink Wireless Prepaid Wireless Roundup CIT Secures Financing for Prepaid Wireless Company MetroPCS Premiers Loopt Social-Mapping Services Virgin Mobile USA Reports Financial Results Dateline Expo: Prepaid Calling Card Update 2008 Inc. 5000 Recognizes Viscom International USAC’s “Carrier’s Carrier” Rule Comes Under Attack NetIQ Extends VoIP Management to Microsoft Office Transverse Launches OSS/BSS Open Source Platform Calling Cards in Brief Dateline Expo: Prepaid and Alternative Payments Update 2008 NETELLER and TransSend to Offer Cards Payments in Brief U.S. Treasury Introducing Direct Express Debit Card Visa Launches New Mobile Payment Services SCX Global Acquired by Rev Worldwide Metavante Selected by Corporate Network eCom ACE and NetSpend Launch March of Dimes Card AccuPOS Announces AccuCount Software Springbok Offers Private Label Prepaid Cards Prepaid 101: ATMs and Prepaid NACS Releases State of the Industry Report PaySpot to Distribute Futura Cards Hypercom Lands Element Payment Services Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - September 15, 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.