With cell phones being readily available and affordable, it's not surprising to see Verizon (NYSE: VZ) continue to sell off its remaining 50,000 pay phones.
Although financial terms were not revealed, Calif.-based service provider Pacific Telemanagement (PTS) will purchase the phones from the ILEC.
Of course, the two companies see the sale from two markedly different angles.
Already operating a profitable and growing cell phone and fiber-based wireline business, the sale enables Verizon to sell off what has become non-core asset, while PTS believes it will be able to increase revenue by nearly doubling the amount of pay phones it operates today.
"Verizon's got a great business, there's a tremendous opportunity there," said Thomas Keane, chief executive of PTS, adding that the company plans to maintain the majority of the RBOC's pay phone while closing some and retrofitting others with new features such as touch screens, credit card readers or other applications.
Arguably, pay phones are a dying breed in the communications landscape. Every year, 10 percent of pay phones are shut down, but they continue to be found at airports, truck stops, train stations and lower-income neighborhoods.
When Verizon completes its sale to PTS--one that the two companies say could happen in November--it will have only 4,000 pay phones, down from the 500,000 it had in 2000. Bill Kula, a Verizon spokesman, said the majority of these remaining pay phones are situated in New York City and the Dallas-Fort Worth airport.
Interestingly, Verizon was the last holdout in the pay phone business. Fellow service providers AT&T (NYSE: T) and Sprint (NYSE: S) sold off their pay phone businesses in 2008 and 2006, respectively.
- Total Telecom via Dow Jones has this article
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