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Hanging up on pay phones?

As possibly last rotary is pulled, pay phone biz keeps sinking, despite fiscal promise from curbside ads

By Rolando Pujol | amNewYork Managing Editor

December 10, 2007

There are only four walk-in phone booths left in Manhattan, and they're all on West End Avenue. This one is at 101st Street. (Kristen V. Brown / December 9, 2007)

The rotary pay phone at the D'Agastinos supermarket in Murray Hill remarkably still functioned, waiting patiently for quarters to feed its coin slot and fingers to turn its dial. But it also was treated like a museum piece: Looked at with curiosity but never touched.

So inevitably, like thousands of its predecessors, the phone was wrested from its longtime perch a few weeks ago and replaced with a push-button phone. It was possibly the last of Verizon's rotary pay phones, said company spokeswoman Heather Wilner.

The fate of this rotary phone is emblematic of the state of the industry nationwide. Just last week, AT&T, a name which conjures the industry's 19th-century roots, announced it was getting out of the pay phone business by the end of 2008. The former BellSouth did the same years earlier.

Yet, unlike the industry's nationwide woes, pay phones curiously remain big business in Manhattan, fueled by lucrative display ads that grace the sides of curbside pay phones. The city alone - which administers contracts with 39 firms that provide street phones - received $18.3 million in fiscal year 2007, with the bulk of that money, $13.8 million, coming from advertising revenues, according to Nicholas Sbordone, director of external affairs for the New York City Department of Information Technology & Telecommunications. In total, pay-phone advertising in New York City is reportedly a $62 million a year business.

But the boom in advertising cannot mask the overall relentless decline in the business.

"In a nutshell, we're an industry really in distress. We're fighting to survive," said Les Shafran, who runs the Independent Payphone Association of New York.

In fiscal year 2007, there were 22,697 street phones in the city, down from about 35,000 12 years before. That decline mirrors the inevitable damage done by the explosion of cell phone service.

Despite the erosion, phone companies still see a business model for the pay phone - the tourists making calls, the cell phone users with dead batteries or who forgot their phones, and the cell technology holdouts.

"Pay phones are still really important for times when cell phones and other means of communication aren't available," Wilner said. "During the blackout here a couple of summers ago, cell phones weren't working. It was really important for people to have access to a pay phone, when they were trying to get home or anything like that."

That's true for Irma Santamaria, 54, who makes a once-a-week trip from the Bronx to her maintenance job on the Upper West Side and relies on a pay phone to coordinate with her husband when he picks her up.

"I have a cell phone, but my husband and I only have one," said Santamaria, who uses a pay phone at 101st Street and West End Avenue, where one of a handful of remaining Superman-style booths stands.

Rotary phones, meanwhile, have suffered a different fate.

Wilner said Verizon believes there are no more rotary phones in service in the city. The one in the supermarket on Third Avenue and East 35th Street probably stayed off the company's radar for so long because of low usage. Verizon pulled the phone after an inquiry about its survival for this story.

The phone bore the 1964 Bell logo, which means it probably dated to before 1969, when the modernist current logo that still persists on Verizon phones was introduced. The outdated rate-card information on the phone suggested it hadn't been serviced in several years.

"No one comes to collect the change, but there probably isn't any change because no one uses it," said Yuriy Miller, the store's manager, shortly before it was removed. And for certain now, nobody will again.

Kristen V. Brown contributed to this story.

The number of street pay phones regulated by the city have been in steady decline.
Fiscal 2003: 30,703
Fiscal 2004: 28,791
Fiscal 2005: 27,365