AT&T is about to hang up on pay phones

December 04, 2007|By Alana Semuels | Alana Semuels,LOS ANGELES TIMES

It's last call for AT&T Inc.'s pay telephones after the company said yesterday that it plans to get out of the business by the end of next year.

But the company's exit doesn't necessarily mean that Superman will have to find a new phone booth to change clothes.

The nation's largest carrier, which operates 65,000 pay phones, will try to sell the business to independent operators that would continue to run them.

The first pay phone, installed in 1878, had an attendant who took callers' money, said AT&T spokesman Michael Coe. Inventor William Gray set up the first coin-operated phone in 1889 at a bank in Hartford, Conn. Both devices were operated by AT&T predecessor companies.

Today, with the proliferation of mobile phones, the number of pay phones in the United States has declined from about 2.1 million in 1999 to an estimated 1 million, according to the Federal Communications Commission.

"More and more people are using their wireless phones instead of pay phones," Coe said. The pay-phone business "is rapidly approaching the point where it will not be profitable."

AT&T and Verizon are the last two major phone companies still in the pay-phone business. BellSouth Corp. unloaded its pay phones in 2003, before AT&T acquired the company at the end of last year, and Qwest Communications International Inc. sold its pay-phone division in 2004.

Verizon spokesman Jim Smith said his company had no plans to quit the business.

Nationally, more than half of all pay phones are owned by independent operators, some of whom would want to buy AT&T's devices, said Willard Nichols, president of the American Public Communications Council Inc., which represents independent pay phone owners.

"I honestly don't think the demise of pay phones is around the corner," he said.

Americans make an estimated 1.7 billion calls from pay phones a year, he added.

Of course, it is not easy being an independent pay phone owner. Independent operators need about 110 calls a month to keep one phone in business. "At 50 cents a call, that's not much of a profit," Nichols said.

Alana Semuels writes for the Los Angeles Times.

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