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Technology Stocks : IDT *(idtc) following this new issue?* -- Ignore unavailable to you. Want to Upgrade?

To: Hawaii60 who wrote (3407)	4/4/1999 2:30:00 PM
From: Secret_Agent_Man	Respond to of 30916

Prepaid Calling Card Industry Careens Toward IP By Brandy Pfalmer With billions of dollars at stake and customers screaming for lower rates, carriers are moving prepaid calling card minutes from public switched telephony networks (PSTNs) to Internet protocol (IP) networks to reap the cost-saving benefits. "Last year, the prepaid residential industry was over $3 billion," says Judy Reed Smith, a principal at the telecom consultancy Atlantic-ACM Inc. (www.atlantic-acm.com) (see chart, "Sales of Prepaid Calling Cards," below). "By the year 2000, this industry could be worth as much as $4.8 billion." Chart: Sales of Prepaid Calling Cards Similar to routing calls over IP networks, prepaid calling cards eliminate part of the overhead associated with traditional telecom. "Anybody in telecom would tell you that they would love it if their entire company was on a prepaid basis," says Sarah Hofstetter, vice president, corporate communications for IDT Corp. (www.idt.net). "It is a lot easier for you to go out with a very aggressive rate when you are offering prepaid because you know you won't be taking a loss in fraud or debt. "For us [having prepaid calling cards] eliminates all fraud. You don't have to worry about billing and invoicing and that ends up not only being a pain in the neck, but it also increases your cost, printing cost and hiring a billing staff. All we have to do now is control the fraud of credit cards," she adds. Hofstetter explains that IDT customers sign up for its IP telephony service, Net2Phone, through the telephone and use credit cards to purchase the service. With prepaid calling cards customers that would otherwise not have phone service have the opportunity to receive it, increasing a company's potential customer base. "There are some people that don't have phones, and don't have phone service," says Lisa Pierce, director of Giga Information Group Inc. (www.gigaweb.com). "Some of them can't afford it and some of them choose not to, [but] prepaid allows them to go to a payphone and make calls." Prepaid calling cards over IP not only reduce costs but also introduce a unique range of features. Endless Ideas "Once it is all digital, then the imagination of the many programmers is limitless," Atlantic-ACM's Reed Smith says. "I think you will find all different ways to adjust the call and transmit the call, many of which we haven't even considered yet." Prepaid calling cards over IP enable personal computer (PC)-to-PC or PC-to-phone calling as well as phone-to-phone. But as the technology has evolved, customers are demanding a phone-to-phone service. IDT has begun that evolution. In the early '90s, IDT began as a PSTN carrier, and then in 1994 ventured into the Internet access business. It seemed the next logical step was to merge the two departments, and hence, IDT bridged the Internet with the telephone systems in July of 1996. "When we began, we gave the software away for free just so we could rack up minutes," Hofstetter says. "We then wanted to eliminate the computer from the equation and start routing calls phone-to-phone over IP." For the PC-to-phone service, IDT has 1.3 million customers, and has a quarter of a million customers for the phone-to-phone service. IDT markets 30 different cards to meet the demands of its customers. Last February, the company launched a product called Debitalk, a prepaid callback phone card. Debitalk enables callers to make an international call while receiving domestic rates. soundingboardmag.com Once again we see that Leaders .....LEAD!