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Convenience stores used to be hot spots for Mark Shmikler, who recalls being able to plunk down several pay phones and watch the money roll in. Now he sometimes has to charge a store owners who still want a pay phone as much as $75 a month just to keep one, even though it is hardly used.
The increase in the use of cell phones has made the pay phone business a lot tougher these days, said Shmikler, the president of Bridgeview, Ill.-based Illinois Pay Phone Systems.
There are about 400,000 fewer pay phones throughout the country than just a few years ago, and those that are left are used considerably less, according to a report in the Chicago Daily Herald. Difficulty in collecting commissions for long-distance calls and a sentiment in some communities that pay phones are crime magnets aggravate the problem.
The fallout includes price increases. For the vast majority of pay phones in Illinois, which are owned by Ameritech, the cost of a local call will increase to a 50-cent flat rate, up from 35 cents for the first three minutes and 25 cents for each additional five minutes, the report said.
"As usage goes down, the cost of maintaining those phones has not," said Denise Koenig, an Ameritech spokeswoman. "The price increase is really to maintain our base."
The change will be complete by September. Illinois and Connecticut are the last states to go to 50 cents for local calls -- those within 8 miles.
Cell phones and prepaid phone cards are the main reasons for a decline in pay phone use, Koenig said.
Six years ago, there were about 5 million cell phones in use, Shmikler estimated. Now there are about 110 million cell phones in consumers' hands. The result is that the pay phone industry has taken a substantial hit and unprofitable phones are being taken off the street in increasing numbers. Pay phones, a familiar part the landscape and some would say popular culture for more than a century, have become a vanishing breed, he said.
"Nationally, I think there were about 2.6 million pay phones around early 1998. Today, we have about 2.2 million pay phones," said Vince Sandusky, president of the Washington-based American Public Communications Council Inc.
He also said usage for an average pay phone has dropped dramatically from about 700 calls per phone in a month five years ago to about 400 today. "The good locations have all been identified and the competition is fierce but (independent owners) now are beginning to walk away," he said.
"Ten or 15 years ago, you put a pay phone almost anywhere and it would be profitable," said Shmikler, who owns and operates 1,800 pay phones throughout Illinois, southern Wisconsin and northwest Indiana. "It's more difficult these days to find any profitable locations."