As cell phones flourish, pay phones take a hit

PHILADELPHIA -- Raymond Spera says he is almost always on the phone, checking messages at work, calling kids at home or making appointments with friends and associates.

These days, he doesn't bother to hunt down a public telephone.

''Quite honestly, I don't use a pay phone at all, because I have this,'' said Spera, 34, waving a cellular phone, which rang insistently on a recent Sunday afternoon in the city's upscale Rittenhouse Square.

''Before, I would run into vandalized or out-of-order pay phones all the time. I would only use them when I had to,'' he said.

Spera is among a fast-growing number of consumers shunning pay phones in favor of increasingly affordable wireless phones that can be used to send or receive calls anytime, anywhere and then be tucked away in a pocket or purse.

Pay phone providers are feeling the pinch.

Nationwide figures are not kept on the decline, but phone providers across the country say it is noticeable, especially in larger cities where the volume of calls is larger.

''I don't think there is any question that wireless phone usage has had a definite impact,'' said Vince Sandusky of the American Public Communications Council, which represents independent phone companies.

Bell Atlantic Corp., which operates 90 percent of the public booths in the Northeast, says it had a 14 percent drop in 1999 pay phone revenue and a 10 percent decline in 1998. Pacific Bell said a similar decline seemed ''intuitively correct,'' though it did not have figures.

It's a far cry from the days of the first coin-operated telephone, introduced in 1889 by William Gray in Hartford, Conn., said Sheldon Hochheiser, a historian for AT&T Corp.

''The story goes that he had a wife who had taken ill,'' he said. ''He didn't subscribe to a phone. So he went to the nearest place -- a local shop -- but the foreman wouldn't let him use the phone. It got him thinking there should be another way.''

It was a clunky wooden thing, with a listening receiver, a speaker to talk into and no coin return, Hochheiser said. But Gray's coin-operated phone worked, and it got rid of an earlier generation of pay phones, which required costly attendants who collected fees.

It also opened up service to about 90 percent of the population who could not afford a home line. In 1902, more than 81,000 pay phones were in use nationwide, a figure that increased considerably in 1912 when New York City installed 25,000 pay phones. By that time, companies had switched to a standardized metal design which basically remained the same until the 1960s, Hochheiser said.

Today, there are about 1.6 million pay phones in the United States at a time when only 3 percent of the population lacks home service, officials say. The number of pay phones is likely to decline as companies tear down underused phones, concentrating those that remain in more lucrative locations such as transportation centers, downtown street corners and office buildings.

The top reason for this re-evaluation comes from the approximately 80 million cell phones now in use nationwide, a number that continues to grow rapidly as the devices become smaller and cheaper, according to the Washington-based Cellular Telecommunications Industry Association.

In addition, the rise of prepaid calling cards and dial-around calling plans -- such as the 10-10 discount programs -- have siphoned away revenue. Pay phone providers receive only small compensation when a competitors' card or calling plan is used at public booths.

And then there's the image and upkeep. In larger cities, companies say vandalism can be commonplace, leaving phones run-down and out-of-order.

All of these factors could lead to the extinction of pay phones, says Anand Anandalingam, a professor of information management at the University of Pennsylvania's Wharton School of Business.