Verizon raises pay phone rates to 50 cents

Verizon controls 70 percent of the pay phone market in 33 states.

WEST ORANGE, New Jersey (CNN) -- The largest U.S. operator of pay phones announced it will raise its rates from 35 cents a call to 50 cents in most places as soon as Monday.

Verizon Communications, which controls 70 percent of the pay phone market in 33 states, blames the widespread use of wireless telephones for the 43 percent hike.

Since 1998, when wireless telephone companies began offering packages that included unlimited phone calls, Verizon's pay phone business has dropped 23 percent, Verizon spokesman Jim Smith said.

"This price increase is one of several creative responses to a business that's severely challenged by an alternate technology," Smith said.

But the additional 15 cents buys callers more time: Four bits will buy a caller local service for unlimited amounts of time. At present, coins have to be inserted into pay phones every three to five minutes.

And in a few places, such as train stations, the company is going to drop the cost to a dime but restrict calls to 60 seconds. A typical caller may say no more than, "Honey, I missed the 6:44; I'll be on the 7:15," Smith said.

Though the price increase begins Monday, it will take the company several months to convert all its phones, "so pay what the rate card says to pay," Smith said.

Other phone companies, including Qwest and SPC, have already gone to 50-cent calls. The pay phone business "is hugely labor-intensive," Smith said, with high maintenance and repair costs.

"We can't do a whole lot to cut costs. The bottom line is we either migrate the price upward or the phones start to disappear," he said.

The price increases won't take effect in New York, where calls are still a quarter. Also exempt are New Jersey, Connecticut, Maine, West Virginia and Rhode Island, where state regulators control prices.

Verizon has responded to reduced pay phone revenue by removing pay phones from some areas -- its national inventory has dropped from 500,000 to 430,000 -- and adding new services such as Internet kiosks at airports, Smith said.

Though regulators in New York require Verizon to keep 95 percent of the city's 9,000 pay phones working at any one time, the city is also a gold mine: The country's busiest pay phones are at 34th Street and Seventh Avenue, at Penn Station, in near-constant use by commuters, he said.