RARITAN, N.J.(BUSINESS WIRE)July 12, 2004--According to a new report from The PELORUS Group entitled «North American Prepaid Cards: Wireline Markets In Transition,» the prepaid phone card market exploded between 1995 and 2000, increasing from $750 million in 1995 to over $3.3 billion in 2000. During this period both the domestic and international components surged. But 2001 and 2002 saw the market contract. In 2003 total phone card revenues enjoyed a turnaround, managing to reach back up to about $3.2 billion.

The direction was not uniform, however, as growth declined for domestic phone card revenues, while international revenues jumped. Tom Miezejeski, Vice President Of Research for The PELORUS Group explains, «Lower rates in the international sector have made international calling affordable for a larger segment of the population. Indeed, rates for international calls have come down sharply in recent years. Besides the impact of competition among phone card vendors, rates for all international calls have dropped as foreign carriers have struggled with heightened competition from other carriers and IP telephony. But this in turn has generated more acceptance among consumers. Thus, minutes of use have grown to more than offset the revenue erosion stemming from lower rates. The result is higher revenues even as some sectors of the market have contracted.»

The report projects a gradual decline in domestic phone card revenues between 2003 and 2008. On the other hand, international phone card revenues will jump by almost 33 percent, climbing to $2.75 billion in 2008. By 2008 the international market will be more than twice the size of the domestic market.

Phone card revenues in Canada are projected to follow a similar path over the next five years. Total phone cards revenues are projected to grow to over $470 million CD in 2008. The report notes that the Canadian phone card market is subject to many of the same price pressures facing service providers in the U. S. Thus, use will grow significantly, but growth in volume will only slightly more than offset price declines.

For more information regarding «North American Prepaid Cards: Wireline Markets In Transition», please visit www.pelorus-group.com