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PROVIDENCE, R.I. -- Verizon will increase the price of a local payphone call to 50 cents in Rhode Island starting Jan. 8.
The conversion involves changes at each payphone and will take several months to complete. Verizon operates 4,900 payphones in the state.
The price change follows an intense and ongoing cost-cutting campaign at Verizon's Public Communications subsidiary, the company unit that operates payphones. The effort was waged to combat declines in both payphone revenue and use resulting from stiff competition from wireless services. Without the rate increase, the widespread availability of payphones would be threatened.
In mid-September, the company began converting payphones in most markets nationwide to the new price of 50 cents for a local call of unlimited length.
Qwest, SBC Communications and BellSouth announced 50-cent pricing for local calls last summer.
With the new 50-cent rate, Verizon is eliminating timed calling in Rhode Island and other areas where callers paid 35 cents for an initial block of time and then paid an additional amount if they talked longer.
The increase to 50 cents for most payphone calls follows erosion in payphone usage of about 23 percent over the past 2 1/2 years, when wireless services became a popular way of calling for people on the move.
At the same time, revenue has decreased overall as a result of federal rules that compensate payphone companies just 24 cents, regardless of how long a call lasts, when callers use pre-paid or post-paid calling cards or dial-around services like collect calling services.
In addition, the company is reviewing the profitability of its payphones and removing some phones to cut costs and increase the return from phones that remain. In most cases, this involves taking out one or more phones from a bank of phones, thus improving the performance of those that remain.
Verizon continues to aggressively cut the overall costs of running its payphone business. "Our benchmarking studies show that we run one of the most efficient payphone businesses in the country," said Paul Francischetti, vice president of marketing and business development for Verizon Public Communications, which operates Verizon payphones.
Verizon also is increasing the price of local directory assistance calls from payphones to 50 cents from 35 cents. Verizon Public Communications must recover the cost it incurs in providing directory assistance to its payphone customers, Francischetti said.
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 28.7 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with about 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.