Death Of The Payphone
They used to be a common sight—before cellphones, but most lose money. Some argue that the entire concept is anachronistic and payphones should just go extinct - but that misses issues like their ‘social role’ for those who cannot afford personal phones, as well as the fact that payphones are the last line of service in a disaster. Most of us don’t need them … until they become a matter of survival. Payphone demise may have major unintended consequences.
The Decline

By the end of the 20th century, payphone revenue had declined below operating cost, making its future very questionable. Over the next 10 years 75% of payphones across the US were scrapped—and the picture is similar in other countries. Yet there remain many situations where the humble payphone is the best, or even the only, solution.
When the core network cannot support full service, such as in a disaster, payphones represent the fairest way of rationing service and indeed providing any service. The phone system has a ‘universal service obligation’ and there are still many cases where the payphone is the only access many have to phone service.
The Options
Many have been considered; including advertising, street WiFi, straight government subsidy—and, in the future, 5G cellular base stations.
New York City, for example, makes around $20m profit from what was a loss-making service. By 2014 NYC had a new contract including advertising and web-based services; with touch screen technology and in-built WiFi. The whole concept was revisited in the wake of hurricane Sandy, which showed the importance of a resilient public communications infrastructure.
The new service was to be free, with emergency buttons, wireless internet & beacons—at no cost to taxpayers. The bidders were a consortium of companies (financed by Titan advertising, Control Group tech studio, Google and Qualcomm). The result was the LinkNYC kiosk.
Tony’s article looks at how this might help future 5G base stations.
UK Developments
Initial plans to simply market the new kiosk in the UK ran into difficulties caused by the different regulatory environment. Ironically, the more open UK business had already started to move into offering public WiFi on a large scale using an advertising-funded model very similar to the new US payphone system. This led to a clash where local authorities had already invested in advertising and WiFi infrastructure with options to out-build 5G in the future. As a result they were hostile to competition from new generation payphones.
Ironically the push to provide free public services like WiFi could result in the loss of other services like payphones. This highlights why multiple providers cannot work when the advertising revenue model is predicated on a service monopoly.
The Future
Technology, like the LinkNYC kiosk, is able to address service and emergency issues as well as providing a revenue stream to help pay for it. The biggest risk is of the new city monopolies stifling the competitive multi-provider infrastructure that gives us our advanced services.
This article was published in the
February 2019
edition of The TMC Advisor
- ISSN 2369-663X Volume:6 Issue:1
©2019 TMC Consulting