Pre-Paid Wireless

MetroPCS, is one of the fastest growing pre-paid cellular carriers in the nation. The basis of MetroPCS's success is simple: they have easily accessible calling plans that follow the tried and true formula of "pay one price." Being that it is a pre-paid service, MetroPCS requires no credit or financial backgrounding of any kind; the customer just buys a phone and pre-pays for what they use each month. The big difference between Metro and the other pre-paid carriers is that for one low monthly price, a subscriber gets unlimited talk time, day or night, week or weekend. The plans range in price from $30/mnth to $40/mnth with add-on features such as call forwarding, voice mail, SMS, etc. Needless to say, Metro plans are an unparalleled success in the "cash-centric" demographic.

Originally Metro had limited payment options for these particular customers: their corporate owned and operated flagship stores were the only venue for walk-in cash payments. It was not unusual for lines of people waiting to pay their bill, to stretch out of the stores and around the block.

Qpay’s Service to MetroPCS:

Qpay's particular expertise enabled MetroPCS to tap a payment processing resource previously unavailable: the authorized retail dealer. Part of Metro's meteoric rise was their authorized dealer footprint in the markets where they were providing coverage. These authorized dealers are typically the neighborhood destination for mobile phone purchases of all kinds, whether it's the phones themselves, accessories, calling cards, or any other such related purchases. Qpay’s solution was twofold:

1. A direct real-time bridge that would enable up-to-the-minute balance information and real time account posting.

2. A retail oriented payment processing interface, turning the authorized dealer into an authorized payment center.

At the dealer level, Qpay provided two types of payment processing portals: the latest and most advanced Verifone dial-up terminal and Qpay Virtual Payment System ("QVPS"), a proprietary PC based processing package. To make a payment, a customer merely has to provide their MetroPCS phone number to a store clerk, the phone number is entered into either the terminal or QVPS, and the customer receives their current account balance in real-time. The customer then makes the payment in cash and their account is updated within 15 seconds of the transaction being completed. A full receipt is provided including phone/account number, payment amount, date/time of payment, and the location the payment was made.

Qpay also handles the entire back-end accounting process, not only transmitting the data associated with each transaction, but also collecting and transferring the funds from the dealer to MetroPCS. Qpay guarantees every payment, taking on full responsibility for funds transfer, freeing MetroPCS to focus their efforts on having their dealers sell more phones and not chasing payments.

Starting with a handful of authorized dealers in Metro's South Florida market in the spring of 2003, Qpay now has over 1,000 authorized dealer locations in its network.

In addition to the dealer/agent payment network, Qpay also processes MetroPCS payments via its Self-Service Kiosks. These Kiosks are installed in MetroPCS corporate stores and other high volume traffic locations. The installed Kiosks are both the in-store and outward facing models. For more information regarding Qpay’s Kiosks, please click here.

Pre-Paid International Long Distance:

We created this product using a very simple and straightforward rationale - pre-paid International Long Distance is big business, particularly among the "cash-centric" demographic. We wanted to achieve three objectives with "*1-2-3" (the branded name of our international long distance):

1. To gain a portion of this substantial ILD market,
2. Generate increased customer loyalty and
3. Create more added-value for our authorized agents.

Having launched late in 2004, thus far, the initial phase has been a big success: we have seen a great deal of repeat business (customer refills) and fairly substantial margins. Needless to say we are pleased that our market assumptions were correct and the product is now ready for it's secondary stages of roll-out and expansion.

To give a more accurate picture of the original rationale behind this product, let's take a look at the latest data for the Florida marketplace:

• The FCC and Scarborough USA + 2003, has the Florida marketplace, as a whole, set at levels ranging from $20M to $25M in monthly spending on pre-paid international long distance.
• The southern portion of the state, defined as being composed of Lee, Henry, Palm Beach, Collier, Broward, Monroe, and Miami-Dade counties, accounts for approximately 70% of the minutes sold, or ~$14M per month.

Given that Southern Florida is where we are headquartered and is also our current flagship market, this was the ideal testing ground for our new product.

We created *123 to be competitive in a very crowded and "cutthroat" marketplace. The two basic rules of thumb were value and convenience. *123 has the lowest achievable rates in the current marketplace and reflects the most straightforward pricing schedule possible. There are NO surcharges, NO connection fees, and minutes used are rounded in one (1) minute increments. In other words, the customer will get the minutes promised, at the rate(s) advertised. This is the primary value judgment that purchasers of these types of programs use: minutes promised vs. minutes delivered. It is often the case that through a series of "back-end" or hidden charges, pre-paid calling rates are typically in excess of 40% to 60% higher than advertised.

Not so with *123, as it is a clean card and "what-you-see-is-what-you-get!"  We also built-in the most technologically advanced features available, such as caller ID recognition, which associates a phone number(s) to an account number and thus enables the customer to place calls without having to enter the typical 10 - 12 digit PIN which can be frustrating due to errors and is always time consuming. *123 is also an account-based system so that the same card/account is used over and over and is continually re-loaded.

Agents are literally bombarded with an endless array of pre-paid ILD cards and products. They "sell" the ones that generate the most revenue, are the easiest to vend, and lead to the least complaints from their customers. Therefore, a card product that is simple in terms of pricing and routinely delivers a high quality call will be welcomed; the complete equation requires the right amount of revenue or incentive, and the easiest modality.

When it comes to card modalities, "scratch" cards or the traditional one-time use throw away cards, currently account for only 22% of purchases in the pre-paid ILD market. Scratch cards are easily concealable, prompting a high incidence of customer and employee pilferage.

These cards also involve high manufacturing and distribution costs and are printed in large batches. As a result, they may remain in circulation for an indeterminate period of time as dead inventory. *123 uses a Point-of-sale activation (POSA) that uses our point-of-sale (POS) terminals and software to activate and/or recharge the pre-paid ILD into customer account. The terminals connect to our host and the cashier swipes a card with an inactive PIN for activation or an existing PIN for replenishment. This modality is estimated to represent 73% of pre-paid ILD purchases, and clearly the first choice of our dealer/agents.

The bottom-line on *123 is that it is a resounding success. The market was identified properly and with great care, the product was developed specifically for the potential customers and imbued with the proper modality and incentive for the agents. This has proven to be the winning formula that is driving *123 into a nation-wide distribution cycle.

Main Advantages for Agents:

• *123 increases in-store traffic
• No need to carry inventory of traditional calling cards
• Customer loyalty and repeat business

Main Advantages for Wireless Carriers:

• An alternative International Long Distance Program
• Direct account access through a *123 DID on the carrier’s switch
• One of the lowest rate program in the market
• Customer loyalty