LONDON-The huge popularity of mobile phones in Europe has had an adverse effect on the once-necessary prepaid disposable (PD) calling cards, which are used instead of coins in public payphones throughout Europe, according to a recent Frost & Sullivan analysis.
“Restraints impacting the PD market, most notably the accelerating cellular penetration, will result in the continual slump in PD card sales,” said Nathan Budd, research analyst. “The strategic focus must not be to counteract this decline, but to adapt.”
As advanced technology including prepaid remote memory calling cards, postpaid cards smart bank cards with integrated phone card functionality and mobile phones gain popularity, analysts believe the PD market will have to find a new niche in order to survive.
According to Frost & Sullivan, although higher mobile-phone tariffs and recently discounted PD cards seem to have put a short-term hold on the downward spiral of the PD industry, its revenues continue to dwindle. The analyst company predicts the market will fall from $1.69 billion in 2000 to $750,000 in 2007, or fall from 335 million unit shipments in 2000 to 216.6 million in 2007.
Frost & Sullivan added that this reduction will allow the PD industry to reach and focus on its core user base, which PD companies could capitalize on, if they play their cards right. However, Budd also commented, “No matter how low the price of a call from a payphone, it is difficult to compete with the convenience of ownership of the mobile phone.”
