In today’s largely digital world, would it surprise you to learn that the United States still has 100,000 pay phones in existence? This number is down from two million some 20 years ago, but pay phones are a steady business for the 1,100 companies still operating them. According to the most recent FCC report, the last generation of pay phones produce a total of $286 million in revenue, reported KJRH-TV.
In areas of the country where cell and landline service aren’t available, pay phones fill a gap. According to Tom Keane, president of Pacific Telemanagement Services, “We have phones in Yosemite Valley that are extremely busy when there’s not snow on the ground.”
He also commented on how pay phones are a valuable option during emergencies and natural disasters. “Every time there’s a disaster our phone use goes through the roof. The pay phone system stays intact for the toughest part of the disaster while the cell networks go down,” said Keane.
However, the industry’s future appears ill-fated, since 95 percent of Americans use cell phones, according to Pew Research. Additionally, the majority of low-income Americans – the target audience for pay phones – now use pre-paid or government subsidized cell phones.
In addition, the Commission recently eliminated an audit rule put in place 15 years ago to make sure network carriers – Verizon, AT&T, Sprint – were properly reimbursing independent service providers that took ownership of most of the pay phones. “Audit requirements are no longer needed as safeguards to ensure that [pay phone service providers] receive the compensation they are due,” the agency said in its order.
All these factors combined affect the industry. “We have an erosion rate that doesn’t have us thinking we’ll be in the pay phone business for long,” Keane said.
March 21, 2018
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