Verizon Tests Lower Prices for Local Payphone Calls

NEW YORK -- Verizon today begins a three-month trial of 10-cent and 25-cent local calls from some payphones in the Boston, Tampa Bay and Hampton Roads, Va., areas. The 10-cent call buys one minute; the 25-cent call buys three minutes.

About 50 payphones in the three markets will enable callers to make a quick local call at a reduced rate. The trial phones, which are located at urban and suburban high schools and on city sidewalks, are adjacent to Verizon payphones charging the standard 50 cents for a local call of unlimited length.

"We believe there's a market for short payphone calls," said Paul Francischetti, vice president of marketing and business development for Verizon Public Communications, which operates Verizon payphones. "That's why we've placed the trial phones at high schools and along community sidewalks. If all you need to say is, 'Mom, baseball practice is over. Come pick me up,' a one-minute call will do it, and that costs only 10 cents.

"We want to see if this low rate will be attractive to people who need to make a quick call. At the same time, we know the 50-cent call of unlimited length is still a good value for those customers who need to talk longer. The 25-cent, three-minute call splits the difference," Francischetti said.

At each test site, there will be at least one phone with a trial price. The phones will display bright yellow signs that read, "Special Discount Offer." Ten seconds before the end of the one and three-minute calls, callers will hear a recording letting them know their time is almost up and prompting them to deposit additional coins or end the call.

Last fall, citing fierce competitive and market pressures and declining revenues in the past three years, Verizon began raising the price of a local payphone call in most markets nationwide to 50 cents. The new price enabled customers to make a local payphone call of unlimited length. Until then, the price of a local call at most Verizon payphones was 35 cents.

At that time, Verizon said that as part of its competitive market response to the wireless challenge, it would also try various pricing experiments, including 10-cent-a-minute calling.

"We're committed to the payphone business. Even with the proliferation of wireless phones, there are still a lot of people who prefer to use payphones -- for a number of reasons," Francischetti said. "So we continually do research to see what products and prices will be most useful for our customers, and, at the same time, keep the business viable for Verizon."

Verizon operates 430,000 payphones in 33 states.

Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 128.5 million access line equivalents and approximately 28.7 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with 256,000 employees and more than $65 billion in annual revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.