As prepaid providers look out over the 2009 economic landscape, it’s probably tempting to sit tight with existing services.  Tempting maybe, but wise? 

If you haven’t recently done so, it’s worth talking to both your existing and maybe some new wholesalers to take a look at the suites of white label services now being offered.

Through the increasingly popular “white label” approach, prepaid service providers have bought their complete service suite and call capacity from a facilities wholesaler or hosted services VNO (Virtual Network Operator). The only thing that the prepaid service provider/outsourcer added was their own label and distribution strategy. This channel hierarchy and services ecosystem has created significant opportunity, by allowing economical entry to the VoIP market and TDM-to-IP migration.  It also gave individual service providers new control over the levels of investment and service creation they would commit to, without impeding their freedom to scale and expand their service offerings and business models.

The hosted prepaid IP service model has allowed significant differentiation based on market targets, demographics, service pricing and calling plans, allowing prepaid service providers to aggressively differentiate themselves vs. their established TDM-based competitors.  But up until now, white labeling has been viewed as an either/or proposition:  a prepaid service provider would either entirely host their own services or entirely outsource them to a services value-added wholesaler.

But in today’s market, hybrid service approaches can open up new markets and opportunities while propping up static (or even declining) call revenues.  The wholesale market has moved beyond the baseline ‘carrier hotel’ and is aggressively investing in service delivery infrastructures and service roll-outs.  For existing prepaid service providers, this offers opportunities to extend your reach into adjacent regions with either your existing brands or with new ones.  White label/in-house hybrid approaches can also give you the option to offer differentiating and compelling new services that can sit on top of (or coexist with) your existing prepaid roster. 

Voicemail is just one example of a compelling service overlay opportunity for prepaid voice services.  It offers credit challenged customers new credibility with important contacts (such as employers), and new accessibility to friends and family members in other time zones.  It also offers you as the prepaid service provider both a new means of capturing consumer loyalty and recurring card and time purchases, and a new driver of call minutes.  And because voicemail services can be tuned to optimize or restrict access based on the caller’s prepaid provider PIN, your voicemail services can be confined to usage via your minutes.

International route quality and costing is another opportunity for hybrid white label/in-house services. Depending on your current call quality and pricing business models, your customers can be offered alternative qualities and per-minute costs.  Wholesaler white label services also extend into core business model management, offering collection of real-time call data records and new levels of information that can help you manage traffic and route pricing more aggressively.

Similarly, white labeled hosted VoIP services, metered through your existing prepaid ratings engine and service controls, afford the option of opening up new small business enterprise-level International calling with fixed usage, pricing caps and reporting options.  While it is certainly true that today’s prepaid service providers are not typically selling services to Fortune 1000 businesses, they often are selling services to loyal small business owners.  For these consumers, international calling isn’t easily deducted as a business expense at tax time because their calls usually aren’t tracked through their business lines, they’re made with ad hoc card purchases. 

There are many other opportunities for hybrid in-house/white label service integrations and service bundling, and more come on line every week.  However, these opportunities and integration capabilities vary sharply from wholesaler to wholesaler.  But for prepaid service providers looking to proactively shore up revenues in an uncertain economy, new white labeled subscriber features, service extensions and calling plans can be key.  Maybe it’s time for a whole new conversation with your wholesaler, and with other wholesalers who’d like to count you as a customer.  After all, negotiating for new service features can also help you negotiate baseline minute costs.  And don’t you deserve something this holiday season?

Best for the New Year, Ken.



Ken Osowski is VP of Product Management for Pactolus Communications Software, whose IP service applications include prepaid, post-paid, conferencing and operator assistance. Contact Ken at kosowski@pactolus.com.