[asterisk-biz] Calling Card / VoIP Service Provider Opportunity

[Alex Balashov]

For what it's worth, I would echo the thoughts of Steve and Praveen 
insofar as to express scepticism about the prospectus for a calling 
card company at this point.  The obstacles aren't really technical in 
nature;  the platform problem can be solved many different ways and 
the solutions are well-understood.  However, there are financial 
hurdles in that if you intend to do it right, you need real capital, 
as Steve said.  But the real problem really does lie in the marketing 
and actually getting the business.  It's really hard, and you're going 
up against an extremely saturated market with some deep-pocketed 
competitors.

On the other hand, if you do have a very specific business plan in 
mind, I wouldn't say it's a complete non-starter.  There are 
demographic segments of the population that are very attached to phone 
cards by force of custom and habit;  first-generation immigrants come 
to mind, as well as older people who take a dim view of online 
purchasing due to concerns about credit card fraud and so on.  The 
other upshot is that these people don't tend to be exceptionally 
price-sensitive;  your prices will have to compare favourably to your 
most visible competitors in the particular markets in question, but 
aside from that, it's not (yet?) the most brutal, acute race to the 
bottom playing out in the VoIP arena as far as I can tell.

It is possible to identify, reach and effectively market to such 
people, and it is important to remember that the audience of this list 
and like-minded communities is not representative of the general 
population.

The biggest problem with getting anyone to invest in and/or fund it is 
that it is by definition a declining market, at least in view of the 
aforementioned marketing orientation.  Calling cards are used by 
people who are reticent toward, ignorant of or unable to afford 
Skype[1], other VoIP options such as Vonage, traditional PIC'd 
long-distance offerings, etc.  This is understood to be a shrinking 
segment of the population, as the adoption and lifecycle of the more 
contemporary options progresses into further stages of maturity. 
Would you invest in my company if I told you I was going to 
mass-market to a shrinking and non-renewing market?

Others here who are actually in the international termination business 
can comment more effectively than I on the cost burdens and margin 
picture of particular routes to particular places.  There is no doubt 
that as with everything in the VoIP cottage industry, the margins 
arising from arbitrage opportunities and pure resale plays are rapidly 
shrinking.

Honestly, I'm torn:

On the one hand, ideologically I want to concur with the people saying 
there is yet a good opportunity for a high-quality, high-value 
offering with good support and execution.  I mean, sure, in principle, 
the last thing we need is another "VoIP + ? = $$ PROFIT! $$" basement 
operation from a machine on a residential DSL circuit draped in dirty 
laundry selling shit grey routes full of FAS and transported over 
latent, unreliable links using G.729A.  We've got plenty of those 
around here.

On the other hand, the rather bureaucratically heavy-handed[2] and 
capital-intensive angle from which you seem to be coming at the 
problem prompts the inevitable gut reaction that you're a bit late to 
the party for that.  Some sort of realistic concession to reality on 
the cost factors and time to market is almost certainly necessary if 
you want to try this.

Most importantly, though, have a really, really good idea of exactly 
who you're going to sell to, and bet the farm on it.

-- Alex

[1] Not Skype itself, of course, but computers and quality broadband 
service.


-- 
Alex Balashov - Principal
Evariste Systems LLC
260 Peachtree Street NW
Suite 2200
Atlanta, GA 30303
Tel: +1-678-954-0670
Fax: +1-404-961-1892
Web: http://www.evaristesys.com/