US telecommunication giant AT&T has announced plans to exit the pay phone business by the end of 2008 due to the declining pay phone usage.
AT&T said that its public communications unit is facing pressure as a result of growing competition from alternative communications choices such as wireless phones and personal communication devices. The company added that it had 2.6 million pay phones in the US in 1998, while the numbers have decreased to one million as of December 2007.
It also said that it plans to phase out both public pay phones and phones provided under contracts at government correctional facilities, and will support the existing contracts and customers during the period that the business is being phased out. All the customers will also receive advance notification of specific plans as well as information on other potential providers and product options. The company, however, claimed that its wholesale pay phone services will not be affected.
The company’s plan to phase out pay phones affects only its 13-state service area as the erstwhile telecommunication provider BellSouth, which was acquired by AT&T in late 2006, had exited the pay phone business.
This is the right time for us to take this step on behalf of our customers, employees and stockholders, said David Huntley, senior vice president for customer information services at AT&T. We expect that independent providers will pick up much of this business, and, as we exit the business, we will be able to refocus our resources to areas that offer stronger growth potential and greater opportunity for the company.
Some complain that ending pay phone service restricts low-income, low-credit consumers from accessing the communication means, according to Reuters. It also said that in the recent years, AT&T has compensated for the fall in traditional phone use through strong sales from its mobile phone and internet business.
Source: ComputerWire daily updates