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By Michael Harris, CEO, Innovative Equipment, Ltd.
Basic communications capabilities have become essential for all but the most impoverished members of the world's population. From business needs to the simple act of keeping in touch with an ever-mobile extended family, the demand for voice line communications has never been stronger. This demand cannot possibly be satisfied with today's land line and infrastructure penetration and one of the primary marketplaces for these services are the developed Latin American countries. Literate, mobile and savvy populations are quickly outstripping their country's abilities to provide the services they need.
Take, for one example, the Brazilian marketplace:
As a country with less than 20% of the population having access to residential phone lines, cellular service would be a natural choice in Brazil. However, the lack of infrastructure to support the cellular service, huge demand creating rationing and even lottery distribution of very expensive handsets, and very costly per minute service all make cellular beyond the reach of the average Brazilian citizen. Enter pre-paid card landline services.
In cooperation with TCS in Florida, Embratel/MCI has pre-sold over 5 million remote memory cards in anticipation of and before the full-scale national launch of its pre-paid program. This tremendous anticipation shows how providing easily accessible telecommunications is like offering a thirsty man a drink. Very little selling is required!
There are two primary types of pre-paid calling cards -- local and remote memory. Local memory cards contain a silicon chip that holds all of the caller information. This chip interacts with a physical reader in the phone set to validate the call and allow the provider to deduct the value of the call from the amount stored on the chip. Drawbacks to this system include relatively high per card production costs and the obvious need for reading devices on every phone set.
The remote memory cards used by a growing majority of the world's population need no new infrastructure at the call origination point. An access number printed on the card connects the caller with the provider's computerized call center. A secret "pin" code from the card is entered through the phone set dial pad and then the call is dialed and placed as usual. No need for chips, chip readers or card insertion in the phone. Charges are automatically deducted from the caller's pre-paid account
So, where are the opportunities for the graphic arts production shop in all of this? Someone must print and supply the millions of cards used every year. Made from plastic or laminated paper, these cards must all be customized with graphics, instructions, access code numbers and pin codes which are securely hidden from public view until the card is in the hands of the user. While direct digital printing from a PC is available for some products, this method carries significantly higher per unit costs (special inks or ribbons, print heads or engines) and is considerably slower than the alternative choices.
Most of the world's pre-paid remote memory cards are printed on lithographic offset presses in large or small format. A run of several hundred thousand cards dictates the use of large format, multiple-up press to print the graphics and static base information on the backs. These cards can then be laminated and die cut into individual CR-080 (credit card) sized units and fed into a high-speed variable data printer. These data printers are generally of the CIJ (continuous ink jet) variety, although some shorter runs are done on credit card personalization systems.
Shorter, more customized runs are printed on specialized one-up, full bleed presses in up to four colors. These cards then receive a printed lacquer coating and pass through the same type of CIJ or desktop personalizing systems.
Several opportunities exist to profit from this system. The purchasing of phone time in large blocks and the resale in smaller blocks is one.
Another is in the materials and value added supply chain.
The third and most underutilized is the cooperative marketing opportunities these cards provide.
The front side of the card is a natural advertising and marketing "billboard" that will be viewed time after time. Why not sell this ad space in manageable pieces? While Embratel in the example above may require 10 million cards per year, I might want to buy 5,000 of them with a few dollars worth of call time to send out in a promotional mailing for my products or give away during a trade exposition. When I do that, I will want a customized message on the card. Herein lies the chance to profit from your ability to produce short runs of customized, four-color process cards in an economical process.
Small and affordable specialized equipment is available to print full coverage high quality offset on individual CR-080 sized cards, inkjet print the variable information on the backs, and then conceal that variable information with a hot-stamped scratch off foil material. The process is not difficult, requires minimal floor space, and is a service that will provide good margins and high demands.
Visit trade expositions dedicated to the pre-paid card industry, read the trade journals (including the excellent Artes Graficas) and learn how you may enjoy your slice of the pre-paid pie.
Michael Harris
CEO
Innovative Equipment
8 Westchester Plaza
Elmsford, New York 10523
Telephone 914-592-3950/888-988-4666
Fax 914-592-3959
Email:mikeh@innovativeequipment.com
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