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Wi-Fi Services Could Save Private Payphone Market

Posted On: 7/15/2012

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TAGS: pay phone, payphone business,Wi-Fi payphone, Van Wagner Communications<, outdoor media, payphone market, payphone operator, payphone route, American Public Communications Council, cellphone usage, coin machine, coin-op news, vending business, vending machine, jukebox

Payphones may be on the brink of extinction in the U.S. unless new services rescue them from being 100% replaced by the increasingly ubiquitous cellphone.

A high-profile example is in New York City, where the municipal government has launched a pilot program to test the effects of upgrading payphones by adding Wi-Fi capability at $10,000 a location.

The city's payphone market, estimated to be 13,000 units, is dominated by Van Wagner Communications, an outdoor media and advertising company.

Van Wagner is running the pilot program, which has resulted in the installation of "military-grade" antennas to turn 10 payphone locations into Wi-Fi hotspots (one in Queens, one in Brooklyn and eight in Manhattan). The Wi-Fi service is free to the public.

Unattended payphones were invented in 1891, just one year after the invention of the nickel-in-the-slot, the forerunner of the jukebox. Nationwide, payphones were operated for decades as part of the Bell monopoly until the market was deregulated in 1984.

The U.S. payphone market consisted of some 2.2 million units in 2000; today, it is estimated at 500,000. This year, some digital experts have gone so far as to declare "The payphone era is over." | SEE STORY

A significant number of U.S. street operators entered the payphone market when it was initially deregulated in the mid-1980s. Most abandoned the sector as large specialized competitors increasingly rolled up the best locations in the 1990s.

A handful of street operators are believed to still have any payphones on their routes. But according to the American Public Communications Council, about 450,000 of America's half-million surviving payphones are operated by some 800 independent businesses rather than large communications conglomerates. The APCC also claims that approximately 140 million Americans still do not own cellphones. | SEE STATISTICS