When I was a kid, pay phones were known to be a very profitable business -- simply checking the coin return on a dozen pay phones within a few blocks would support most kids' spending habits. Times have changed, however, and even AT&T
AT&T will be divesting or disposing of some 65,000 pay phones that it operates throughout 13 states, assets that were part of SBC Communications before the merger between the two in 2005. The move follows a few other major operators, such as BellSouth and Qwest
With an estimated 250 million U.S. residents now sporting cellular phones from carriers such as AT&T, Sprint Nextel
To balance out the declining usage in pay phones, AT&T and other carriers have not only been reducing the number of pay phones, but also jacking up the price of calls to cover costs. AT&T's latest price increases occurred in 2001, when the charge for local calls went up to $0.50.
In 2003, Verizon Wireless embarked on a brief and ill-fated attempt to revitalize its pay-phone assets in New York by installing Wi-Fi radios in the booths. The plan to make each phone into a wireless hotspot fell flat, however, as use of the booths for high-speed data access was never in demand from consumers. Even putting high-speed wireless hotspots in busy retail areas such as McDonald's
I'm sure most kids today won't be shedding any tears when all those phone booths disappear. After all, digging for change today wouldn't even come close to paying for their cell-phone bills. And AT&T might just convert a few diehard pay phone users to its wireless plans in the process.
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Fool contributor Dave Mock can't even remember the last time he used a pay phone, but he still checks the coin return occasionally. He owns shares of Starbucks. Dave is the author of The Qualcomm Equation. The Fool's disclosure policy spices up social events with its charm and wit.