The pay phone is an endangered species.
Threatening its existence are the handy cellphone and other wireless devices that have caught on with North Americans, prompting many telephone companies to pluck phone booths like unwanted weeds from street corners, malls and gas stations.
In the United States, 400,000 pay phones have been dismantled in the past three years, with 2.2 million remaining, according to the American Public Communications Council Inc., a Fairfax, Va.-based trade group representing independent pay phone companies.
"A person with a wireless phone is unlikely to use a pay phone," says APCC president Vincent Sandusky. "Obviously, we're concerned. Our members have a significant amount of investments sunk into the hardware and the systems to run pay telephone operations and it's particularly difficult for them to adjust to these new business realities."
There are 118.4 million wireless subscribers in the United States and 9.1 million in Canada, according to industry associations. Mobile phones have grown at an annual rate of 20 to 30 per cent in the past decade, according to the Canadian Wireless Telecommunications Association.
On the other hand, pay phone usage has declined from about 700 calls from a single booth each month to less than 500, Mr. Sandusky says.
In Canada, Bell Canada has removed thousands of booths from urban locations in Ontario and Quebec after concluding the number of calls made from them was "extremely low," spokeswoman Catherine Hudon says. It has seen the number of pay phones fall about 10 per cent in the past two years to 93,000 from more than 100,000.
In Atlantic Canada,the number has remained relatively flat year over year at 15,700 this fiscal year compared with 15,400 last year, according to Aliant Telecom Inc., which provides phone services in New Brunswick, Prince Edward Island, Nova Scotia and Newfoundland. But revenue from pay phones has fallen by 6 to 7 per cent over the same period, spokeswoman Deanna Gallaway says.
While the number of pay phones has remained relatively fixed at 5,440 from the previous year in Saskatchewan, the figure has declined about 8 per cent since 1998, according to Saskatchewan Telecommunications Inc., which offers services in the province where 30 per cent of the population live in towns with less than 1,000 people.
In British Columbia and Alberta, pay phones have increased to about 38,000 in the past five years, but Telus Corp., which offers phone services in the two Western provinces, says it has witnessed a reduction in call volumes for pay phone services.
The speedy adoption of wireless is not to be blamed entirely. Pay phone companies have been sideswiped by technical and bureaucratic setbacks, too, especially in the United States. The U.S. pay phone industry had been expecting a windfall, because changes to the Telecommunications Act of 1996 were supposed to allow them to collect a payment for every completed call, including toll-free calls for which pay phone providers previously were not compensated. But instead, systems that were introduced to track these calls were "shot full of holes," and pay phone companies have yet to realize those additional fees, Mr. Sandusky says.
The act also required that telcos provide dial tones at cost to prevent unfair competitive practices with independent pay phone providers, which also has yet to happen. Both of these issues are still being addressed by the U.S. Federal Communications Commission. Mr. Sandusky expects the rate of decline in pay phones to slow dramatically once the regulatory fixes occur.
In the meantime, BellSouth Corp., which owns 143,000 pay phones in nine southeastern U.S. states including Florida, Tennessee and Louisiana, has announced that it will leave the pay phone market by the end of next year unless it can find a buyer for the business.
"We've seen some trends in the business and those trends are indicating that customers are opting for other options," says David Blumenthal, a BellSouth spokesman. "Wireless telephones, interactive pagers -- all certainly provide people with more options."
Independent pay phone providers such as PhoneTel Technologies Inc. of Cleveland, Ohio, have reported declining sales and rising losses in the latest quarter. In June, PhoneTel agreed to merge with rival Davel Communications Inc.
"Every one of the majors are . . . attempting to sell their [pay]phones, but they just can't find a buyer for them, which is a pretty sorry state of affairs," Mr. Sandusky says.
For many pay phone providers, it's very expensive to maintain pay phones. It costs SaskTel more money to operate them than the phones take in. Some generate fewer than 20 calls a month.Report Typo/Error
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