[johnye]

I got another concern to ask here. There are many advertised low rates phone cards out there, that seem to offer outrages low rates. I know they would charge connection fees, dormant fees, maintenance fees, and pay phone surge charges, or even clever rounding scheme. I believe their low rates might be the result for having cheap routes that they established and their entrepreneurship in adapting to the changing environment, since all they need is a few cheap routes and readily affordable technologies to start a business for the particular destinations. I wonder if my callshop idea will ever fly due to such fierce competition from these low rate phone cards, because the lowest termination rates are still several folds higher than the advertised phone card rates, and consumers are drawn by the rates. I wonder if you have done any study for this issue or have any marketing experiences that can be shared with me. Thanks.

[admin]

Originally Posted by johnye

I got another concern to ask here. There are many advertised low rates phone cards out there, that seem to offer outrages low rates. I know they would charge connection fees, dormant fees, maintenance fees, and pay phone surge charges, or even clever rounding scheme. I believe their low rates might be the result for having cheap routes that they established and their entrepreneurship in adapting to the changing environment, since all they need is a few cheap routes and readily affordable technologies to start a business for the particular destinations. I wonder if my callshop idea will ever fly due to such fierce competition from these low rate phone cards, because the lowest termination rates are still several folds higher than the advertised phone card rates, and consumers are drawn by the rates. I wonder if you have done any study for this issue or have any marketing experiences that can be shared with me. Thanks.

Yes we agree with your comment that the agressive termination rates is what drives the price lower for their cards. But then again, look at the flip side. When the termination rate is lower, it is because those are generally grey routes. In some cases shady business involved in it and no gurantee of quality line or business conduct.

So we would say it is a give and take. We think quality along with good pricing will be the winner. If you get good termination rates but bad service, you would have to constantly look for terminators and the quality of your phonecard offers bound to suffer from this. In the long run, the stable quality and reasonable price will win. But if you are looking to make quick money and not worry about branding....then finding cheap rates for termination is the way to go.