I am writing in response to Fred Parker’s letter “Phonecard deal dials up trouble” (MW July 1).
I fully agree with his sentiments that promoters, agencies and phonecard companies have to deliver value to the public. The consumer is smart and cannot (or should not) be fooled.
Inaccurate letters, such as Mr Parker’s, create confusion. Telecommunication tariffing is not confused, it is complicated. Promotional prepaid phonecards store the value of the card remotely against a personal identification number (PIN).
I am aware of only two BT products using the PIN system: the charge card and a global calling card. The national UK-to-UK rate on the calling card is 25p per minute, and on the charge card it is 20p per minute at any time of the day. Promotional phonecards at 20p per minute are therefore both legitimate and deliver value.
Prepaid mobile vouchers work on exactly the same system. The rates vary from the mobile companies between 34p to 55p, depending on the network provider. A considerable premium over a promotional card, strengthening the value proposition of a promotional phonecard.
A one minute call from a payphone costs 13.9p, however, the consumer will have put 20p into the payphone to make that one minute call (the caller actually gets 86 seconds for the 20p), again in line with promotional cards.
Finally, there has been a huge proliferation of discount phonecards using the PIN system. These products are offered by a range of companies and are a complex proposition.
We are supplying over 2,000 retail outlets with these products in three countries around Europe. Discounted phonecards are a different proposition to free promotional phonecards.
While I agree with Mr Parker’s sentiment of delivering value to the consumer, I disagree with his letter which is inaccurate and misleading.
It is clearly the phonecard industry’s duty to explain the various tariffing structures to promoters and agencies.
At Excel, we do explain these costs, what the aims of a promotion are and the market conditions, to ensure value is delivered to both consumer and promoter alike, and that the health and growth of the promotional prepaid phonecard market continues to prosper.