Wednesday, February 23, 2005

Prepaid Cellular Service & Bill Payment is Alive!.

This year, several well-known prepaid companies have filed for Chapter 11. Other companies have avoided reorganization and have drastically scaled down their operations.
Court bankruptcy documents from prepaid companies read like chapters from the same book. While the paths to demise differ somewhat, each includes millions of dollars owed to major carriers like Verizon, Qwest and Sprint. Other debts listed include hundreds of thousands of unpaid dollars to distributors, printers, software providers, as well as peripheral companies like Federal Express.
Analyzing the scene
It's not that bankruptcies are a shocker in the prepaid industry. The market has had more than its share of fly-by-night companies that have gone out of business. But when larger companies go down, many begin to wonder: Is this a sign of bad things to come for the industry? What will happen to those left standing? The answer to those questions is very different depending on who you ask.
"Prepaid is still a very good business," says Ariel Charytan, vice president of VCG Telecom and Epana Networks, an international carrier, New York-based CLEC and provider of prepaid cards. "But it's a nontraditional business, and you have to have technical complexity to be successful."
He says companies go down because they grow quickly with strong marketing teams and rock-bottom prices, but they don't have the systems in place – technological and back office – to keep the business profitable. The bottom line, Charytan says, is that many companies are not making cost-efficiency changes that will save money as sales increase. Still, for the businesses who do business right, there is plenty of market share to be gained, he says.
Market forces
On the other hand, Mark Rubenstein, CEO of EZ Rewards, says these bankruptcies are a sign that the industry can't and ultimately won't hold up under cutthroat price wars and attrition in the domestic market due to competitive wireless services. "I think you are going to see three to five major companies making serious moves into consolidation of market share," Rubenstein says. "We have been forced into offering mostly cellular, which is a very low-margin item. Prepaid phone card volume has dropped by significant percentages."
The fact that many companies don't maintain fair accounting practices just makes matters that much worse, yet that's been a problem that has existed since the first handful of companies hit the streets with cards in the early '90s, he says. "When you sell a product at a discount," says Rubenstein. "The right way to deal with the money is to take it and put it in the bank. Then whatever is left after the expiration is profit. Carriers are not actually doing that. It ends up they are playing one dollar against the other."
Lessons to learn
Whether it is poor business practices or a shrinking market causing the most recent shakeups, most in the industry agree that survival means understanding where their colleagues fumbled along the way.
In reviewing court documents from various companies, there are common scenarios. In some cases, staffing ramped up to handle sales, but anticipated sales never resulted. Inevitably, industry rumors started swirling, and confidence eroded among distributors and retailers.
Some companies invested heavily in switch equipment and software – the list of unsecured creditors tells the tale. At some point, cash flow can't keep up with unpaid bills. Then there are the carrier bills – usually large sums are owed. By this point, there is little choice left but to file for bankruptcy protection.
One thing that remains clear in the prepaid industry is that customers look for specific brands that they know, says Dr. Judy Reed Smith, CEO of the market research firm Atlantic-ACM. That's proven by the fact that companies that buy smaller businesses often maintain the brands they buy.
Companies that continue to operate under Chapter 11 reorganization have to gamble that they haven't burned too many distributors and customers to retain street credibility on their brands. They have to convince distributors that the problems stemmed from honest miscalculation and misguided business planning, rather than deliberate deception. As one distributor describes card providers in general, "In this industry, you never know who is trying to pull one over on you."
Star's decline
One established master distributor, Star Telecom Network Inc., was brought down through its relationship with Enhanced Global Converged Systems (EGCS), which was a wholly owned subsidiary of TECNET. When TECNET filed for bankruptcy, Star at first believed it could survive by paying the carrier bills directly to the courts, which it did, according to an ICN interview (July 2004) with David Eisenstadt, CEO of Star. The company knew the important thing was to keep the brand alive for its distributors and customers on the street. During that interview, Eisenstadt reported that he had just barely saved his company and had switched its minutes to a more stable Global Crossing.
Yet somewhere during the switch, something went wrong because Star filed for bankruptcy on July 14. Repeated calls to Star's Woodland Hills' office yielded endless ringing without voice mail available to leave a message.
Star's story is especially surprising as the company has been around since 1995, and Eisenstadt had a good reputation as an established master distributor. According to observers, one thing that Star clearly got wrong along the way was not checking the financials of a provider before jumping into a deal.
Speaking generally about the business of telecom, Rubenstein cautions, "Pay attention to who the network service provider is. Check its books. See if they really have any money or if they have contingent liability accounts."
Placing trust too easily in partner companies can be a problem in the telecom industry as a whole, says Rubenstein. "Our company has narrowed down to using one carrier. We've thoroughly reviewed its balance sheets. The company is profitable, and it's a diverse company. I have had two (providers) fail over the years, but we have never had a card die."
Remains of the day
While bankruptcy stories are harrowing, they are not necessarily bad news for remaining players. For distributors, there are fewer providers, but those who remain may turn out to be the reliable ones. Charytan says the providers that can survive will gain more market share and build more reliable businesses. "From day one, we have done business in an honorable way. Every time one of these companies leaves the market, we end up gaining market share. There are other companies that remain as well, most notably IDT. They have a very strong presence."
Staying in business requires paying the bills to carriers and distributors alike. It also means having a savvy enough business to tread international terrain. While cellular eats away at the domestic prepaid card industry, cards are still a main source of communication internationally. Among the long list of unsecured creditors in numerous filings are many European telecom carriers including France Telecom and Telenor Global Services of Norway.
"It's easy to run a U.S. phone service," says Charytan. The trick that many companies don't get, he adds, is how to cost effectively and technologically deal with serving different countries with different financial and reporting systems while still maintaining a margin.
"There are a lot of international regulatory issues," Charytan says. "You might be a good marketer, that is, sell cards on the streets with good campaigns, but if your back end is not strong, you won't make it. It's important to run an organization that can manage millions of details effectively.
"When we got into the prepaid market," Charytan continues, "India was selling at 28 cents per minute, and there was no mobile. There was little room to screw it up. Fast forward a couple of years, now you can get it for 6 or 7 cents. Volume has gone up, but you have all these different carriers there. An outsider would not understand that."
Rubenstein agrees that dealing in the international market is hard, but necessary. "The international marketplace is a dangerous game," he says. "Prices from the master carriers change, and cards go upside down overnight."
Atlantic-ACM's Smith agrees with Charytan and Rubenstein. "While prepaid wireless is expanding, prepaid cards will not grow over the next few years," Smith says. "But if prepaid carriers do clever partnerships and consolidate, they can survive and do well in the prepaid market."
Smith also points to the success of IDT and says the company is an example of how to survive in the industry. "IDT continues to grow through internal leveraging of its telecom and distribution networks combined with opportunistic external purchases," she says.
However, if consolidation is inevitable, those companies that will either buy or be bought will have to stabilize now, avoiding the pitfalls along the way.


Sunday, February 20, 2005

The Wave Of The Future! Bill Payment & Cellular Service Providers Technologies

The Wave Of The Future! Electronic Walk-In Bill Payment Services & Cellular Phone Services

Here's How Retailers Are TurboCharging Their Businesses For The Road Ahead With Walk-In Bill Payments/Prepaid Wireless Cellular Phone Services, Plus More!. Your Niche To Compete With The Superstores, By Defining Merchant Retailers Into Need Fillers!.

Wireless Direct Now Offers Electronic Bill Payment Service; Retail Licensing Provider of Bill Payment Service & Cellular Providers Services Technologies.

Shorewood, Wisconsin -- The electronic age has been bridged by a new electronic bill payment service now offered through Wireless Direct, Solutions for Retailers. The service is called Pay All Bills and provides "one-stop" convenience for anyone needing to pay any bill.

The entire process is completely safe, reliable and underwritten by an F.D.I.C. insured bank. Rather than purchasing a money order, finding an envelope, purchasing a stamp, and taking the bill to the post office, a person, by taking that bill or statement to Merchant Retailers, can become an established bill payment customer and pay any bill that is payable to any biller. The entire bill payment process is completed at one convenient location. The Pay All Bills system is a nationwide, Internet based solution allowing Merchant Retailer Customers to make it an easy choice for any person to pay any and all of their bills, month after month. The system utilizes relationships with thousands of commercial billers in various industries that have agreed to accept payments electronically. Additionally, any biller not currently participating in our electronic network will be contacted by the service to discuss details about how their business can become eligible to receive payments electronically, thereby enhancing their customer service.

Time frames for payment settlement vary between billers, most as quickly as two business days, depending on whether the biller can accept electronic remittance. Even if a biller cannot receive an electronic payment, still forwards the funds to the biller.

"This process has been well received by billers and customers alike," said Kirk McLaughlin, CEO, Bank, Ralls, Texas, owner of the bill payment software. "Inexpensive electronic bill payment has been reserved for those with a bank account, until now. We are pleased to offer to individuals that do not have a banking relationship a way to conveniently pay bills, too," added McLaughlin.

More information about this service can be found at: http://www.prepaiddirectwireless

Contact: Office Manager
Communications Director
DirectBox 71101
Shorewood, Wisconsin
(877) 947-3577 (toll free)

Thursday, February 17, 2005

Bill Payment & Cellular Phone Service Providers

Bridging the Financial Services Digital Divide
Bill payments is a state of the art electronic bill payment system offering access to accept payments anytime, anywhere and in any fashion to any biller. The consumers love it because it allows them to virtually pay all their bills at Merchant Agent retail location. This will greatly increase retailers revenue, generate more walk-in traffic, attract new business, and provide a value customer service.
Typically, the un-banked individual purchases money orders to make payments remitted by mail. Purchasing one money order for each bill payment is a hassle for the bill payer. Instead of purchasing money orders, with this service he can establish an account at a "Pay All Bills" pay station and return to the location each time a bill is to be paid. Or, once a payer has an account within the system, he can visit any "Pay All Bills" pay station location, anywhere in the country, to make a payment.

The local payment agent offering the service typically charges a modest fee for facilitating the transaction, and payment is then transferred to the creditor. The "Pay All Bills" system utilizes a worldwide network of billers, and the number of billers continues to increase with time. Large and small billers are included in the various networks, and local billers within your area can be added for your customer's convenience. Additionally, the local payment agent can view productivity reports via website.
Bill Payment & Cellular Phone Service Provider

Friday, February 11, 2005


Bill Payment Services & Cellular Services Providers. The Wave Of The Future!. The SMART Solutions Made For Smart Business Owners!

Increase Profits and Attract New Business
Were you aware that there are literally millions of US households that do not have a checking account. Millions of these households need your businesses to use this highly needed conveniently way to pay all of their monthly bills!. How many of these customers are yours? Now you can offer them an option...Bill Payments & Cellular Services.
Options to pay any bill, to any biller, in any fashion. A nationwide network Bill Payment Services.
Start generating revenue by offering your customers a service that "closes the loop" on Electronic Bill Payment & Cellular Phone Service.

Convenience, Saves Time and Saves Money For Your Customers

Millions of Americans adults don't have a checking account, 25%-35% of all bills are paid by walk-in customers. You can make it easy for your customers to pay their bills, people who have limited transportation, prefer paying in cash, want to make late payment, don't trust the mail or want a receipt by Bill Payment Service, a Federally established owned service.

There is no longer a need for customers to purchase money orders, then mail, or go to each biller location, customer bill payments is processed electronically in your place of business, no money orders, no stamps, no envelopes, no gas expense, with no loss time taken off from work.
The Pay All Bill Payment Service will provide a competitive advantage for all types of businesses. The Bill Payment Services will attract new customers, along with establishing repeat customers for your business, plus customers will purchase other goods and services while visiting your place to pay all of there household bill payments, we can't emphasize this enough, this bill payment service system will help your businesses in so many other great ways with goods and services you retail presently.

This service is a great traffic builder, encouraging your customers to come back month after month. Getting customers into your stores to pay all there bills is going to become more and more simple, once customers get used to, and know they can pay all billers their, It will become a habit!. Bill Payment Solutions that shares a common vision with you about how your business can win in your market. This will be exciting of your business becoming need-fillers for your customers, the new emerging innovating Bill Payment Service concept.

Bill Payment Services. The Wave Of The Future!. SMART Solutions.

Think about it. This is all about how to increase traffic by deploying innovative strategies to make retailers more competitive with greater option innovations in technology, that hold the promise of generating additional capital to allow retailers to compete more effectively and allow merchants to be more effective pursuing the detail of retail. The new technologies involves no upfront cost, monthly fees or inventory costs.

Take advantage of services DIRECT today!. It pays to deal DIRECT, we know what SMART solution services can do for your BUSINESS!.

Every once in a while a product comes along and revolutionizes the way we do business. Electronic bill payments & cellular phone services is one such product.

Prepaid Trends: A Telecom Industry in Evolution or in Revolution?

The prepaid industry in 2005 will not resemble the industry of 2000. The bulk of society’s changes over the past five years stem from technology benefits, the technology crash, and the World Trade Center disaster. While some analysts forecasted the demise of the technology revolution after the 2000 tech bust sent technology company values plummeting, the reality has been the contrary. Telecom, entertainment and media firms – as well as other technology companies – have had to find ways to improve their margins, revive shrinking demand and create a new dynamism to drag them out of crisis. During these last Darwinian years, indeed, some important technology improvement have found a way to our homes and daily lives, and finally changed the way we live. Just as prepaid products are everyday products made to fit people’s ways of life, the prepaid industry has evolved to fit new lifestyles.

First of all, we changed the way we communicate. Communication means have become more mobile, more present (thus more annoying) less expensive, simpler, more useful and, true to the technology industry’s eternal search for improvement, more intelligent. Whether or not every change has been positive is debatable, but we can say that this evolution has considerably altered the manner in which we fulfill the basic human need to communicate. Fifty-eight percent of the US population owned a cell phone as of December 2004, including forty-one percent of preteens and teenagers (11-to 19-years old), a significant portion of which use increasingly popular prepaid plans. ATLANTIC-ACM estimates that between 2005 and 2007, nearly forty percent of new cellular users will choose prepaid plans.
Of course, these penetration figures are still small in comparison with European wireless penetration rates that are into the eighty-percent-plus range, but the development of unlimited night and weekend minutes plans and large communication service bundles (family plans, free in-network calling, service bundles incorporating wireline and wireless services, etc.) have altered the landscape. If we add to these factors the skyrocketing penetrations of landline VoIP plans and cable telephony, the reality is that domestic prepaid card users are increasingly fewer and further between. In other words, the prepaid calling card market is shrinking as a consequence of new technology trends. Even though VoIP adoption and healthier balance sheets have pushed carriers to offer better rates for their domestic calling cards, competition from substitutes is insurmountable and the domestic prepaid cards’ revenues will continue to shrink at an annual rate of –17.5 percent from 2005 to 2009.

On the other hand, the international prepaid card market continues to expand – supported by increased demand as more foreign-born users are living in the United States and dropping prices boost volume. The average international minute rate has been divided by six between 1998 to 2004, and these rates will continue to shrink due to the combined effect of technological improvements reducing the cost of communications transportation and continued deregulation in telecom landscapes around the world... However, the international side of the industry also faces competitive substitutes. Prepaid wireless carriers have access to emerging technologies, too, and are eager to compete for the (relatively) fat-margin revenues international calling represents.Unlike traditional wireless carriers that have mass-market models and are not effective at meeting the needs of niche markets, new prepaid wireless carriers have studied and understand the prepaid niches. Mobile Virtual Network Operators (MVNOs) have blossomed like flowers these past two years based on their marketing prowess. Virgin Mobile, child of the young-at-heart Virgin Group, resells Sprint PCS services under its own brand though its own youth-oriented prepaid wireless service to nearly two million customers – not bad in only two-and-a-half years of service. Tracfone, which was one of the first MVNOs in the US – although it is not yet ten-years old – passed the three million subscriber mark in 2004, and continues to resell services from both Cingular Wireless and Verizon Wireless. 9278 Communications, STI and other prepaid specialists just jumped on the train while retailers such as 7-Eleven have already launched and entertainment providers such as Disney and its subsidiary ESPN have announced plans to launch an MVNO service in 2005.
MVNOs are capturing market share from traditional wireless carriers on the prepaid front and ATLANTIC-ACM expects that MVNOs’ prepaid wireless subscribers will represent 63 percent of the total prepaid wireless customer base, or 18 million subscribers, at the end of 2005, and nearly 80 percent of prepaid wireless subscribers, or 32.7 million, by 2009.
Is the prepaid market undergoing a revolution? Probably not. But prepaid products have always been evolving with the progress of technology, the march towards a cashless society, shifts in our habits and lifestyles, and with the new, more communicative, world in which we expect to be able to talk worldwide any time and any place. The prepaid industry is a transforming industry at its core, following customers’ needs and desires. Evolution is its detail for retail. Hence, an evolving industry it is and it will remain, because prepaid providers have learned to re-invent themselves more frequently than Madonna.

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Digital Distribution 2005

Since the inception of the prepaid industry, billions of card products have been developed, printed, inventoried, shipped and sold. There have been long paper cards, short paper cards, plastic cards, and even metal cards shipped and sold all over the world. But the information really necessary to the consumer is not the card or the packaging it comes in. Actually it’s the information printed on the card. The access numbers, PIN numbers and customer service numbers are all they really require to use the service. Therefore the card is merely a vehicle to transport the information to the consumer. Hanging pieces of paper and plastic have become an accepted mode of transportation for prepaid products and services.

In this age of shrinking margins, fiercer competition, and stronger regulation, companies are seeking ways to reduce costs and make their products more effective in the marketplace. Eliminating costs is the most effective way to add more value to the product, thereby making it either more profitable or more appealing to the consumer. Graphic design, printing, inventory and shipping are the hurdles that providers cross before they can even put a product to market – well before they find out if it is even an effective product in the marketplace. Imagine spending months developing a product, and untold hours marketing a product, only to find out it is ineffective and a complete flop because your competitor has beat you to the punch. In my years of marketing in the prepaid industry I have probably seen an entire forest of paper products scrapped and tossed out due to this exact scenario.

I realized that these costs were the biggest hurdle to market when I started taking an interest in digital distribution. Now don’t allow the computer term to scare you away. This is not sci-fi or an idyllic dream of the future, however this is a primer for distribution processes that are currently available in the marketplace that eliminate design, printing, inventory and shipping of the product. Yes there are new costs; however they have a significant return on investment and a more enduring life cycle than paper that is shipped to retail consumers.
There are several key aspects to digital distribution, and all reduce or eliminate the aforementioned costs and make your company more profitable. Most distributors, however, have not yet utilized these methods and are struggling to stay in business.

Digital distribution encompasses:

1. Point of Sale Terminal: This method of electronic distribution eliminates cards and gives customers a paper receipt with the required information to utilize the product and bring it to market. The system keeps the inventory and launching a new product is simple. New methods are gaining ground in the industry and if you haven’t investigated them lately you may be missing the boat. POS is not your father’s terminal system anymore; PC and Web based systems are being welcomed with open arms by retailers seeking a more effective way to sell products to their customers. They are rejoicing with the reporting and inventory capabilities and not having to worry about clerks and customers pocketing products. With POS you don’t have to visit a retailer on an ongoing basis, you don’t have to count inventory in and out of the store and you know which employee sold each piece of merchandise and when. Yes, terminal systems have been around forever and each new company that enters the fray has another new idea to push into the marketplace, making it all the more confusing for a distributor and retailer to understand. What they are really seeking is a system that works, that delivers the product fast, and gives them the information they require in relation to the product and their income.

Terminal systems have been the battle cry of the prepaid industry for years. However, they do have some limitations. One main drawback is the actual processing capability of the terminal. Most terminal systems were not manufactured to process data; they were developed to capture it and send it to a host. The second drawback is the speed in which they connect to a host – the connectivity speed of most terminal systems is 2400 bits per second or bps, slowing the sale. This can be painstaking when a clerk has a line of other customers waiting for checkout. The third drawback of many terminal systems is the limited amount of memory available to store product information on the system (which is usually limited to a product name and a value – not including information about countries, minutes, cost per minute and other disclosures that may be important to consumers). The fourth, and most important, drawback to many terminals is the interface for the clerk. The display on most contemporary terminals is a single line of alphanumeric characters. The clerk has to punch in a series of numbers to retrieve a product category, and then select a vendor by punching more buttons, then typing in a value to retrieve the product. The interface is ineffective, outdated and confusing to new clerks. Newer graphic interfaces are being accepted by retailers and eliminate the need for in depth training and constantly referring to a user manual or cheat sheet to get the desired results. Merchant retailer & Distributors seeking new methods of delivery should thoroughly investigate this new way of having prepaid cellular for there customers. Carry all major wireless carriers with no up-front cost for inventory. The SMART solutions made for Smart businesses.


Phone: 877-947-3577