The Decline of the Pay Phone Industry

When I first started in Telecom back in the 1990s I remember when a large percentage of phone card calls were made via local pay phones but with the rise in cellular phone and the ease of acquiring one, came the demise of the pay phone industry.

According to the FCC website there were over 2 million pay phones throughout the US. Now, 10 years later, that number is half of what it once was, with a little over 1 million total pay phones still in existence. The number of calls made has also decreased dramatically from over 2.5 billion in 1997 to around 1.7 billion.

While you will still find many Mexicans and other recent immigrant groups waiting on the corner pay phones because they don't have the credit ability to qualify for a home or cellular phone, I think that with rise in popularity of prepaid mobile, many of these loyal pay phone users will switch to prepaid cell phones for all of their calling needs, leaving the pay phone operators in a much worse situation than they are in now!

One thing worth noting is that much of the decline in pay phones comes from the private pay phone operator sector with the public companies like AT&T and Verizon only making up for a smaller percentage of the decline. Today private pay phone operators make up exactly half of overall pay phones on the street.