North American Prepaid Calling Cards Market

Research Overview

This Frost & Sullivan research service titled North American Prepaid Calling Card Markets provides an overview of trends and revenues of the current segments, along with a complete analysis of key market drivers and restraints. In this study, Frost & Sullivan's expert analysts thoroughly examine the domestic and international prepaid calling cards segment.

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Domestic prepaid calling cards
• International prepaid calling cards

Market Overview

Rise in Immigrant Population and Cost-effectiveness of Prepaid Calling Cards Drive Growth in a Mature Market

Prepaid calling cards have been available to North American consumers since 1986. This is currently a mature market with numerous contenders. Despite various challenges the industry faces, prepaid calling cards are here to stay. "Additional features and benefits such as Internet accounts, digital information and entertainment services, and debit and payroll cards are now getting added to calling cards, which further enhance the overall value to consumers", says Abhishek Murali, analyst of this research service. "The immigrant population growth and the opportunity that exists in the international calling cards market are very important for service providers to achieve growth and increase market share."

Prepaid services remain the most price competitive in the long-distance market. This is especially true in the international space. Competition is fierce from VoIP, wireless, and 1+ services (traditional wireline long distance), yet prepaid calling continues to be the lowest price point in some markets. Further, many find the convenience of prepaid calling attractive. Consumers can now purchase prepaid calling cards from a wide variety of retail locations, as well as through the Internet. The cards are also available in an assortment of denominations and usage minutes. These factors combine to hike revenues of the calling cards in the international market.

Multiple Benefits of Calling Cards to Boost Revenues

This market is passing the mature stage of the industry life cycle. Though there is a lack of financial attractiveness, there is also immense potential for service providers to diversify into other related product categories. The number of international travelers to North America has been steadily growing, and this is expected to act as a major boost to the calling cards market. Leisure travelers make up a large portion of the international visitors, with the rest comprising business travelers. The calling card proves to be the best option for these visitors to stay in touch with family and friends. Low cost, easy availability and impermanence of stay are some of the major factors for these visitors to consider prepaid calling cards. Moreover, business travelers find convenience in using global calling cards to make calls anywhere.

Prepaid calling cards were once considered attractive predominantly for credit-challenged consumers. In recent years, a more mainstream audience has realized its benefits. "The savings and conveniences provided are attractive to a wide range of consumers, including immigrants, un-banked and under-banked consumers, students, business travelers, as well as natives", explains the analyst. "Additionally, as providers are beginning to offer more 'clean' cards through POSA terminals, calling cards are expected to become popular with many end users."