AT&T Hangs Up on Pay Phones

Another sign of the times: AT&T has announced it'll be out of the pay phone business by the end of 2008.

The preponderance of cell phones in U.S. society may be creating all sorts of businesses opportunities that didn’t exist two decades ago, but it’s bad news for at least one former stalwart of the American landscape: pay phones. Over the last few years, public coin-operated phones have gone from being something one could see on many street corners and in most businesses to quaint rarities…nowadays, if you need one, you can expect to spend a lot of time trying to find one, and, if you can find one, you’ll be astonished at the cost of a single local call. There used to be almost 3 million public pay phones in the U.S.; now, there are an estimated 1 million in service.

The reasons for the pay phones’ decline are simple: with an enormous percentage o the American public using mobile phones, the need for public pay phones has declined, so companies offering pay phones are earning far less money from them. And pay phones are still a pain to operate and maintain, subject to the elements, vandalism, and needing regular service and collection by way of a real life human being.

Today, telecommunications giant AT&T announced it would be exiting the mobile phone business by the end of 2008. AT&T subsidiary BellSouth had already quit the pay phone business in its nine-state area; AT&T’s move will impact a thirteen-state area, consisting of Illinois, Indiana, Michigan, Nevada, Ohio, California (through Pacific Bell), Wisconsin, parts of Oklahoma, Kansas, Texas, Arkansas, and Missouri, and areas covered by the Southern New England Telephone Company.

“This is the right time for us to take this step on behalf of our customers, employees and stockholders,” said AT&T senior VP for customer information services David Huntley, in a statement. “We expect that independent providers will pick up much of this business, and, as we exit the business, we will be able to refocus our resources to areas that offer stronger growth potential and greater opportunity for the company.”

AT&T plans to phase out both public pay phones and phones it provides under contract at prisons.