• January 1, 2008
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Putting Asia in Your Pocket

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Phone cards and pay-as-you-go phones are just about everywhere; convenience stores and electronics dealers have walls and racks full of them. This overabundance of availability means the pressure is high for a mobile virtual network operator (MVNO) to gain any significant market share. Red Pocket Mobile is one of the successful ones, thanks to a particular niche: With the help of VoIP Logic's Cortex System Management Web Portal, Red Pocket has captured the hearts and minds of the Asian-American community. "Our question was how to provide a compelling value proposition to set us apart," says Joshua Gordon, COO at Red Pocket Mobile. "We found the answer in low-cost international calling through Chinese-character handsets, with no long-distance charge. Customers can also use the long-distance account as a 'calling card' from a public phone." Red Pocket Mobile works through a large network of agents, dealers, and distributors to serve Chinese, Filipino, Vietnamese, and other distinct ethnic groups throughout the United States, and is the only U.S. mobile operator to offer mobile handsets with Chinese menus and texting capabilities. The company faced a double challenge when introducing functionality that let customers use their airtime balance as an international calling card whether or not they were using their Red Pocket Mobile handset. After integrating wireless, calling-card, and international-calling functionality in an easy-to-use manner, the firm also needed to automate the back office for distributors, agents, and end users to present a unified package for separate billing and service-delivery platforms. "AT&T takes great care to protect the security of its billing platforms -- they don't give MVNOs access to direct debit," Gordon says. "We had to work with them to find an alternative system." Fortunately, Gordon knew Micah Singer, founder and CEO of VoIP Logic, a provider of hosted and outsourced VoIP infrastructure components. "I've known Josh since 1998, in various iterations throughout the industry," Singer says. "Two years ago, he started a project that grew into Red Pocket. To make it work, he needed to balance integration and feature management." Gordon had clear ideas of where he wanted Red Pocket to go, and that included a strong ease-of-use factor. "Josh had a lot of success getting individual distribution points -- this is where integration helped, in terms of resellers," Singer says. "With other MVNOs, a vendor would be getting 27 commission checks for $10 apiece; why would they want to carry yet another brand? Plus, when recharging the account, the serviceperson had to ask how the customer wanted to allocate the money -- a clumsy process." VoIP Logic deployed its Talking SIP system to provide call authentication and prepaid balance management, with Cortex as the distributor management portal. With those features embedded in the mobile handsets and the authentication features of the combined management solution, Red Pocket Mobile users can call China, Singapore, Canada, Hong Kong, and Taiwan for the same cost as a domestic call. The software also expanded Red Pocket usage via the calling-card capabilities built into the Cortex/Talking SIP platform. Cortex integration and Web portals, coupled with Talking SIP's authentication software, and Red Pocket Mobile's clear vision of a multiservices play, allow the MVNO to succeed in the converged telephone-services market. "The key reason for an MVNO's being is to differentiate itself from major carriers," Gordon says, and Red Pocket Mobile is pushing forward with its business plan. "We're planning to roll out service to other populations, and we're also planning some new Vonage-style Class 5 VoIP services." Red Pocket Mobile will address point-of-sale functionality that allows for recharging and instant invoicing at all retail distribution points, and plans to extend its use of Cortex to give end users a rich, customized, self-care interface. THE PAYOFF: By implementing VoIP Logic's Cortex and Talking SIP products, Red Pocket Mobile:
  • achieved average revenue per user 15 percent to 40 percent greater than that of its competitors;
  • exceeds the industry average refill rate and amount by 20 percent; and
  • pushed into a crowded, highly targeted market and has maintained a 10 percent compound monthly growth rate.
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