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CALL IS OUT FOR PREPAID PHONE CARDS CONSUMER PRODUCT MARKETERS LINK UP WITH LONG-DISTANCE CARRIERS FOR PROMOTIONS

By Published on .

Prepaid long-distance telephone cards are about to break out of their ugly duckling status in the U.S. promotional marketing arena.

Widely used for a decade in Europe and Asia, the disposable cards offering consumers free long-distance time are finally catching on here, and will be used in several major consumer promotions expected this spring.

What's even more intriguing to marketers eyeing prepaid calling cards as promotional vehicles: interactive capabilities including cross-marketing and advertising of other products and services, and customer database development through users of the prepaid cards.

"It's an unexplored area for most U.S. marketers that's just in its infancy, but prepaid calling card promotions are opening new channels to customer acquisition and loyalty," said Leslie Milloy, marketing manager for AT&T's PrePaid Card unit, recently repositioned to take greater advantage of such opportunities.

AT&T wouldn't reveal whether any such interactive marketing promotion deals have been inked yet, but Ms. Milloy said the PrePaid Card has generated "intense interest" for promotions this spring from package-goods marketers, airlines and hotels.

Several theme parks and Coca-Cola Co. are among marketers said to be planning consumer promotions this summer featuring prepaid calling cards as premiums.

Sprint's prepaid calling card promotion with Reebok International, underscoring Sprint's World Cup sponsorship this summer, is one of the fledgling industry's biggest to date.

Starting in May, consumers buying the Reebok Integrity Pro soccer shoe will receive a prepaid calling card good for 10 minutes of free long-distance calling. The card will be showcased on Sprint's World Cup-theme network TV spot breaking late this month via J. Walter Thompson USA, San Francisco. Sprint wouldn't reveal additional details.

MasterCard International, however, has challenged Sprint's use of calling cards for World Cup promotions, claiming a violation of its own "card-based payment" sponsorship deal; industry experts believe Sprint's prepaid calling card promotion will be unaffected by the challenge.

MCI Communications Corp. also announced a new prepaid calling card this month called PhoneCash, which it hopes to eventually offer to consumer marketers for promotions. Initially, it's being offered as a standalone long-distance calling service through retail outlets, said Terry Maco, MCI's director of international and prepaid calling cards.

Like MCI, AT&T and Sprint also sell their prepaid cards directly to consumers to be used for regular long-distance calling. AT&T's PrePaid Card is sold through its retail Phone Center stores in increments ranging from $5.99 for 10 minutes' calling up to $29.99 for 50 units, slightly below its regular rates.

Consumer promotions offering prepaid cards have offered increments of 5 minutes' up to 20 minutes' free long-distance calling time, depending on the size and scope of the promotion.

Smaller companies offering prepaid calling cards are well ahead of the Big 3 long-distance carriers in this arena, having offered the cards for several years without any consumer promotion tie-in. The lure, instead, is images of sports and music superstars on the cards; in fact, these images can make the cards collectors' items.

In the past two years, a novelty collector market has sprung up around the cards, in which an Elvis Presley prepaid calling card offered last year by World Telecom Group, Mountain View, Calif., fetches $2,000 on the collector market, the company said. The card was originally worth $10.

"Using stars and novelties on prepaidcalling cards has helped drive consumer awareness of cards, and it's part of the learning curve marketers have been through, but now we want to move into mainstream consumer promotions using prepaid cards," said Kevin Pirolo, president of Advantage Communications.

The Memphis, Tenn., company coordinated a two-month promotion using prepaid calling cards this winter for Ryder Trucks, and has also developed several lines of collectible prepaid calling cards, including a new one featuring endangered species.

Global Telecommunication Solutions, New York, which coordinated a consumer promotion using prepaid calling cards in 1993 for Lufthansa German Airlines, this year is coordinating collector-appeal cards for the National Hockey League, Major League Baseball and Marvel Comics. Each is expected to get consumer product tie-ins.

Marvel hopes to take advantage of both the collector lure of prepaid calling cards and the straight consumer promotion premium of offering free long-distance calling.

This month, Marvel introduced prepaid long-distance cards in three designs based on collectible comic book covers, offering 20 minutes of calling time for $10 each. The cards are being sold through Marvel's merchandise catalog, which is bound into all March comic book editions. The cards are also being marketed through comic book dealers.

Later this spring, Marvel will unveil another card in a consumer promotion, likely tied to a fast-food or soft- drink marketer. That card will probably also in clude a collectible comic book character or cover, but its main thrust will be free long-distance calling and interactive marketing features.

"The prepaid card promotion will [offer] us the opportunity to involve kids in games and other interactive functions that will help extend our brand through the promotion," said Jan Rimmel, associate director of Marvel Entertainment's special projects division. Jerry Inc., New York, is one of several agencies Marvel works with to develop promotions.

Jeff Jensen contributed to this story.

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