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US Government Bans The Sale of Phone Cards

In what will sure send shock-waves through the phone card business, the US Government recently announced that it has passed a law banning the sale of prepaid phone cards. Congressional spokesman Dr Pepper issued the following statement: "Phone Cards are just bad and we don't want them sold anymore." The ban is set to go into effect starting today April 1st and lawmakers are wasting no time on their next major law, the ban of sugar in chocolate followed by.... April fools!!!!!

The Death of the Payphone

It's hard to believe that only 10 years ago the payphone market was at its peak with over 2 million payphone scattered throughout the United States. You couldn't walk for more than 100 feet in any direction in a major city without seeing one! Today you would have to walk for miles to see one! The American Public Communications council now estimates that there are approximately 400,000 payphone left in the US and declining at a rate of about 10% per year.

I can't say this is a surprise. The proliferation of the cellular phone has made the payphone much less useful. In fact the decline of the payphone matches u exactly with the growth of the mobile phone market. Today almost 90% of Americans use cell phones and with the recent popularity of prepaid mobile, even the recent immigrants and lower classes also now own a mobile phone. It used to be the convenience store always had a payphone outside for the immigrant groups to go and use their phone cards to make a call back home but today, those same people now walk out of the store, pull out their cell phone and use their phone card to make the call.

The major telecommunication companies have already abandoned this once hugely profitable business with Verizon selling off most of it's payphone to PTS in 2011 (AT&T and Sprint sold off their businesses in 2008 and 2006, respectively). There is still a market out there for payphones especially in high traffic service related public areas like airports, train stations, hospitals and rest stops, it's just going to take you a little longer to find the one or two phones which are now most likely hidden off in a corner somewhere. If it continues this way, 10 years from now the only place you will be able to find a payphone is in a museum!

Stats courtesy of the Payphone News