By bundling the cards with corporate promotional marketing services previously offered separately, Sprint hopes to cash in on new growth in the prepaid card market, estimated to be worth $1.55 billion by InfoTech Research.
The growth surge comes from new technology that allows companies to use prepaid cards for more sophisticated marketing applications-employing the cards as promotional premiums that also let the marketers amass data from consumers.
"Prepaid cards are really picking up steam as marketers learn various new things they can do to add to a promotion," said Patricia Sieh, spokesperson for international business markets at AT&T Corp. "It's part of the relationship marketers are building with customers."
Sprint pioneered prepaid calling cards with the FonCard in the 1980s, but it suddenly faces intensified competition.
AT&T has gained significant momentum since introducing the AT&T Global Prepaid Promotional Card last fall as a value-added service to customers of its International Business Markets Division. Clients include Norwegian Cruise Line, Northwest Airlines and Mazda Motor of America.
MCI Communications Corp. is beating Sprint on another front by concentrating on non-promotional prepaid long-distance calling cards sold through supermarkets and convenience stores. This week, MCI unveils the MCI Prepaid EXpresscard offering greater security for retailers. Its first customers are Wal-Mart Stores, Kmart Corp. and Mobil Oil Corp.
While Sprint continues to sell its Spree non-promotional card to consumers at retail, Marlene Waltz, director of prepaid cards sales and marketing, said Spree is "no longer the major growth area."
FOCUS ON PROMOTIONS
Instead, Sprint wants to focus on developing promotions and market research programs for marketers through sweepstakes, contests and games using prepaid cards as premiums.
"The prepaid calling card market has changed a lot," Ms. Waltz said, "and we're changing our operations accordingly to give marketers one-stop shopping for all the marketing technologies now available through prepaid cards."
Currently, Sprint claims to be No. 1 in developing mass consumer promotions using prepaid calling cards for marketers including Gillette Co., Lee Apparel Co., NBC and Amoco Oil Co.
Its latest example was a promotion for Gillette offering a free Sprint prepaid card inside Atra shaver packages. When using the card for the first time, customers were given the option of answering a few market research questions for Gillette.