Got Minutes? Prepaid Calling Helps Generate Traffic Across Foreign Waters

Posted: 04/1998

Got Minutes? Prepaid Calling Helps Generate Traffic Across Foreign Waters

By Jennifer Knapp

It has been more than a year since the World Trade Association (WTO) completed the
Basic Telecommunications Agreement (BTA), which has set the pace for international telecom
deregulation. With more than 70 governments signed on under the BTA, it is news to almost
no one that foreign telecom competition is burgeoning. Long distance companies looking
toward that market will be well advised to consider their prepaid phone card options for
boosting their international viability.

The Big Picture

Take a company such as Resurgens Communications Group, for example. Resurgens provides
raw international long distance traffic to other carriers, and the company has contracts
to provide international long distance capacity to 98 carrier customers. What is the one
thing all those carriers want?

"The carrier wants nothing but network traffic," says Ed Hixon, vice
president of product management for Open Development Corp., a wholly owned subsidiary of
Glenayre Technologies Inc., Charlotte, N.C. "And it is not so much the volume of
users as it is how much traffic those users are going to generate."

Generating traffic or minutes is a prepaid phone card platform’s specialty. Dennis
Gross, director of sales and marketing for Cable & Wireless Specialized Calling
Services, Vienna, Va., says one of the things Cable & Wireless’ international prepaid
program, the Prepaid Passport, allows the company to do is offer multinational companies
programs that have never been offered before around the world. "We are going to be
able to start offering advertising programs or the ability to do IVR (interactive voice
response) programs that will change the complexity of what they have been doing in Europe
and give them more of a taste for the American flair," Gross says. These value-added
options are what prepaid phone cards offer international users to keep them on the line
longer, thereby generating more minutes for carriers.

The Right Tool for the Job

"(TCS Inc.) provides carriers with the tools to get minutes on their
network," says Marc Thomas, director of product development for TCS, a Ft.
Lauderdale, Fla.-based outsourcing solutions provider. With its eye largely on foreign
markets, TCS offers calling card services to carriers and international corporations
through its Universal Service Manager product.

Acting in a service bureau capacity, TCS offers customers network access without having
to buy, maintain and implement an enhanced services platform. For carriers not equipped
with either the time or the technical resources to institute an international prepaid
program, a service bureau solution could be the best ally. TCS’ customers have the option
of buying the equipment and having TCS operate it for them, rather than buying a turnkey
system. "Carriers are intrigued by the fact that they can have a company where they
can outsource the whole platform, but still have ownership in it," says Thomas.

TCS also will install a customer’s platform and wipe its hands of it, but Thomas says
the company discourages that, as training the personnel to operate a platform can be far
more costly in both time and money than paying for service bureau management.

Simply having satellite locations around the world can make a corporation the perfect
candidate for an international prepaid program. Voiceware Systems Inc., of West Palm
Beach, Fla., offers an enhanced service switch, which can be upgraded to a larger Excel
Communications Inc. switch when the traffic requires it. Paul Flanders, director of
marketing for Voiceware notes that a company can buy a switch such as Voiceware’s and run
all the company’s traffic to its satellite locations on a private line. Then, on top of
potentially saving thousands of dollars in long distance bills on the private line, the
company can offer prepaid calling cards to personnel or personnel families, or for
promotional giveaways. With the switch’s recharge application, customers can recharge
those phone cards, thus generating more traffic on the company’s network.

But if prepaid services are not enough to entice entrepreneurs, further consideration
of this platform’s service may help. "Our switch is capable of doing international
callback, prepaid calling, prepaid wireless, voice mail, fax and voice over IP (Internet
protocol)," says Flanders. For the market savvy, the voice over IP capabilities might
just secure the final vote. Although the die is not yet cast on the quality of packetized
Internet voice traffic, the market potential of this popular network option should keep
carriers, at least, listening.

The Nuts ‘n Bolts

What are companies actually buying when they engage the services of companies such as
TCS or Voiceware Systems? Legwork.

Open Development’s Hixon says, "The first thing we typically run into is market
identification." A carrier must first identify whether it wants to target
cost-conscious subscribers, for example, or the credit-challenged. After the service
bureau helps clarify a target market, its customer marketing solution "finds the best
channel for getting the message out," says Hixon. "That is step number one:
Market penetration. Identify it and communicate to it."

With the market identified, hardware installation must follow. Nine times out of 10,
however, the local atmosphere will be dissimilar to practices in the United States. TCS’
Thomas says at this point, the company "might look for a strategic partner in-country
where it makes sense to partner with either a carrier or a large multinational." Or
the company will go in independently and obtain collocation space.

According to Gross, Cable & Wireless has divisions across the world, which the
company has merged or has purchased outright. Through these mergers, the carrier has
access to employees who are nationals and know the do’s and don’ts of the local
administrations. The purchasing of equipment alone can be a logistical nightmare and can
be a fine reason to let the veterans take the lead.

Thomas says once the collocation agreement is met, TCS will order the circuits for the
switch, but "the length of time it takes for circuits to come through can depend on
where you are locating."

This is due, in part, to situations in which a single local distributor has exclusive
rights to sell that equipment in that country, explains Hixon. American-based companies
must have the equipment shipped to the United States, where the system is configured and
tested. Then it must be shipped to the collocation sight–surpassing any customs
difficulties–for installation.

Capturing the minutes from there is merely a matter of fine-tuning the system to meet a
customer’s needs.

"Everyone wants this flavor of interface or this level of redundancy, but although
we put the standard starter kit together, there is much customization for everyone,"
says Hixon. For that purpose, Open Development puts project management and customer
marketing in place, and TCS has a network operations center with online network management
and live customer service representatives available 24 hours a day.

Whether a company wants to buy a platform turnkey, or create a hybrid scenario with a
service bureau, entrance into the international prepaid arena can be easier and more cost-
effective than one might expect. And as Open Development’s Hixon adds, "The idea is,
once I get the subscriber online and they are billing time with me, I want to do
everything in my power to keep them on."

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