Tweet

Premium Rate Services in Canada Flourishing

Guest post by: Bob Bentz

Article Overview: Anytime a government gets out of the regulation business, industry flourishes. The premium rate services market in Canada is proving that.

Premium Rate Services in Canada Flourishing

The sky is falling.

According to a recent study by Phone Play Plus, the premium rate services market in the United Kingdom has dropped to 810 million pounds in 2009, down from $1.08 billion just two years earlier (Analysys Mason).

Across the pond, the market for premium rate services in the States has dropped even more dramatically since AT&T exited the American 900 number business in 2002.Once a $985 million market, no research companies even keep track of the market size any more.InfoText, once the industry trade show and publication, previously held an annual event in Las Vegas that attracted over a thousand delegates.It eventually switched its name to Internext and became the trade show for the adult internet industry before it merged with the AVN show in 2009.

Amidst all of this gloom, could there possibly be a bright spot?

Consider Canada.

In 2006, Telus (then BC Telus), the second largest 900 number carrier in Canada, exited the premium rate services business, thus leaving staid Bell Canada as the lone premium rate services provider in the nation.Soon after, new regulations from the Canadian Radio-television and Telecommunications Commission (CRTC) moved to accelerate deregulation of the local telephone services market.Inter-Exchange Carriers (IXC) were no longer regulated and subject to tariffs.The unanticipated benefit to deregulation efforts was an improvement in the premium rate services market.

It seems like whenever a government deregulates an industry, competition flourishes and improvements occur in the marketplace.Canadian 900 numberswere no exception.Entrepreneurial companies were now able to enter the premium rate services 900 number market and compete directly with Bell Canada.Independent companies that understood the industry better at the retail level entered from both the service bureau and the carrier end of the business.Such smaller companies were able to move more swiftly with market conditions and provide both a cheaper and a more reliable 900 number product.

Start up costs at the carrier level for new 900 numbers were eliminated and carrier holdbacks were no longer required, except in the case of a problem account.Limits on charges per call were no longer a factor.

Content restrictions were also eliminated.Concerns over chat and psychic programs, once mainstays of the industry, were no longer considered problem applications.

Chargebacks, which were always the scourge of the North American market, were suddenly under control.When a consumer called requesting a chargeback, he was no longer met by provincial carrier customer service agents who were happy to provide a quick and immediate refund rather than get hollered at by the caller. After all, the carrier was collecting its fees whether the consumer ultimately paid or not; it simply passed along those costs to the service bureau.

Today, things are much different.When a consumer requests a chargeback, the customer service function is being provided by an entrepreneurial company that has a direct interest in seeing that the consumer bills are paid.Paul Hehn, CFO of Advanced Telecom Services, reports that chargebacks at his company have been significantly reduced.“Before deregulation, our overall chargeback rate at the service bureau level had climbed to 13%,” said Hehn.“Today, with the ability to interface directly with the consumer, we have reduced overall chargebacks to approximately 4%, and that’s with a program mix that includes slightly riskier services than in the past.”All of this means more money going back into the pockets of the information provider and media partner.

Most important, however, was the influx of new business from successful European companies in the Call TV business.North America had never seen Call TV programs to any great degree, as previous efforts had usually failed.Not this time.The Call TV market is especially strong in Canada and with a struggling advertising industry, many TV stations have embraced the idea of making money off of its late night inventory that used to be a money loser for them.

It was television programming that also initially embraced the pound code (voice short codes) and opened up an entirely new billing mechanism for Canadian phone calls. Prior to Call TV shows, the pound code was nothing more than a cool idea that very few Canadians even knew about.Today, the public has embraced the pound code technology through its prominent exposure on television.

“Canada has been a pleasant surprise for us the last few years,” said Bob Bentz, president of Advanced Telecom Services which has been active in the Canadian market since 1993. “The 900 number business is much stronger and the pound code has opened up the cell phone market since consumers in Canada are not able to dial 900 numbers from a cell phone.”

Anytime a government gets out of the regulation business, industry flourishes.The premium rate services market in Canada is proving that.

Related Articles
  Taxation of Non-Resident Franchisors in Canada
  Group Health Insurance Renewal Explanation
  What’s the State Of Asset Finance Solutions in Canada and What Asset Based Lending Rates Make Sense For My Firm ?
  Ways To Find A Good Mortgage Canada Rate For Your House
  Mortgage Interest Rates In Canada – Fixed Versus Adjustable Rates
  Mortgage Canada Rates – What’s Out There that the Banks are not Telling You?
  How Much Will A Business Franchise Loan Cost When Financing A Franchise In Canada ?
  Mortgage Canada rates - some implications and considerations
  Slashing Your Insurance Prices
  Tips To Find The Best Rates Of Mortgage In Canada
  Equipment Leasing and Canadian Lease Financing
  Select Your Ontario Canada Mortgage Carefully
  Investing in Workmans’ Compensation Safety Really DOES Pay
  Current Mortgage Rates and Trends – Fixed or Variable?
  Tips For Determining What Rate To Charge In Your Home Based Service Business
  How To Work With The Best Canadian Leasing Companies In Business Financing and Financial Services ?
  Find the Best Rates for Your Canada Mortgage
  The New Shape of Business Financing and Commercial Lending Options in Canada .
  Bank Mortgage Canada – 70 Lenders And 5 Banks
  Financing Independent Movies Via Tax Credits For Indie Film financing

Article Tags: 900 numbers, business industry, canada, premium rate services
Referred by: http://www.searchengineworkshops.com/



Related Forum Posts
taxes in canada - Well in Canada we only have a few provinces and the Sales tax is slightly different. Here in Ontario the Goods & Services tax has reduced to 5% from 7% in the last year due to the promises made by the government in place.
Help me name my moms business - I think Infinity Cleaning Services sounds better than Elite Cleaning Solutions... Why the Solutions? What is there to be solved? You simply get a rag with some Windex on it and wipe away.... plug the vacuum and Vac Away, get a mop and mop away. Stick to Infinity Cleaning Services... ICS sounds cool...
Accessing the Canadian Market - Leo, an idea that came to mind is try to align yourself with Hispanic Organizations in Canada. This will build your credibility within communities and get more referrals. Not sure if you plan on being based in Canada or operate your business from Columbia but either way being in the web development arena allows you to work from anywhere. You can also search for opportunities originating from Canada thru elance.com, getafreelancer.com, freelance.com or rentacoder.com
Re: Introducing a US franshise to a Canadian market - [quote="BuzzAroundBooks":1l00q6iy]Hi Everyone, If there was a franchise you liked and located exclusively in the U.S., how likely would you be able to introduce the first one in a new market like Canada? How open are franchisors to this sort of idea? Has anyone heard how this was done in the past?[/quote:1l00q6iy] US franchisors are really open to "export" their concept to Canada for 2 main reasons: the proximity and the culture: Canada is just a few hours away from any US city and both cultures are very similar. I am actually reading stats on this subject as I write and about 80% of american franchises tat go international go to Canada first.
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Creating a Better Place to Work

How to Ask for a Flexible Work Arrangement

How do I finance a franchise?

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.