BellSouth to exit pay-phone business

(Telephony) BellSouth said last week that it plans to abandon its pay-phone business entirely, citing a dramatic usage decline and advanced competing technologies.

The Atlanta-based RBOC said it would begin removing its more than 143,000 pay-phones from its southeastern U.S. service area immediately and anticipates that all phones will be out of service by the end of 2002.

The pay-phone business has experienced sharp profit declines since 1998 as the number of wireless, calling card and toll-free number users has increased. Recognizing the declining trend, the third-largest U.S. local telephone service provider said that the move would allow it to focus its efforts in more profitable markets

“This decision will allow BellSouth to focus on it core broadband, Internet and digital network offerings, as well as domestic wireless data and voice business and Latin America,” said Charlie Coe, president of BellSouth Network Services. “BellSouth has carefully evaluated the market trends in the pay-phone business, which indicate that our customers are opting for the new technology options we provide.”

In response to the announcement, both Verizon Communications and SBC Communications said they would continue their pay-phone services across the Northeast, Mid-Atlantic (Verizon), Southwest and Midwest (SBC) regions.

A spokesman at BellSouth said the company would honor all existing contracts with host location customers--such as airports, gas stations and hotels--and that customers wanting to remain with BellSouth through 2002 may do so.

Contracts that extend beyond December 2002 will be handled on a case-by-case basis, the spokesman said.

The company also said that it would allow its customers to choose a new pay-phone service provider and that BellSouth hopes to sell its equipment directly to the new PSP.

“That’s our preference right now,” the spokesman said. “If that’s not a possibility, we’ll remove the equipment from its location and then explore our options.”