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AT&T to end dwindling pay phone business

Top U.S. phone company AT&T Inc said on Monday it plans to end its dwindling pay phone business by the end of 2008, as more consumers use mobile phones.
/ Source: Reuters

AT&T Inc. will exit the rapidly shrinking pay phone business by the end of next year, before it becomes unprofitable, the company said Monday.

AT&T will sell 65,000 pay phones, in prisons and in public places, within its original 13-state area before the end of 2008, said spokesman Michael Coe.

AT&T decided to leave pay phones, a tiny portion of the telecommunications company that has 67.3 million wireless subscribers, before they reached the point of being unprofitable, he said.

AT&T officials said they will try to sell as many of the pay phones to independent operators as possible; those that are unsold will be removed.

“This business has been shrinking rapidly,” said Coe, who said the company has been phasing out of the business by not renewing contracts as they’ve expired. “We’ve known for a while that we would exit.”

The pool of pay phones nationwide has shrunk from 2.6 million to 1 million in the last decade. AT&T had roughly 400,000 pay phones in 1998, but it has seen a rapid decline in the business since then.

BellSouth Corp., which AT&T acquired at the end of 2006, already exited the business, as has Qwest Communications International Inc.

AT&T shares rose 7 cents to $38.28 Monday.