Analyst Don't expect pay phones to disappear - 2001-03-19 - Atlanta Business Chronicle Page I of 2

Atlanta Business Chronicle - March 19' 2001. ;

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From the March 16, 200't print edition -r M qr,e itt q! _E_d tli-on -$!o r1qs

Analyst: Don't expect pay phones to disappear

Anne lrefi

A teenager leans against a pay phone, her cell phone clamped to her ear, a symbol ofjust one big

challenge to a declining industry.

Will a familiar icon soon disappear? BellSouth Corp. may be giving up on pay phones, but industryanalysts insist tlrat they're here to stay.

"There's always going to be a place in America for the pay phone industry, but it's going to be a much

smaller version of its former self," said telecom industy analyst Jeftey Kagan.

Therewere2'6miltionphonesinserviceinearlylggS;now'only2'2millionareinsewice'downmorethan 15 percent. Many pay phone service providers (PSPs) are in distress.

The stock of TampapSp Davel Communications Inc. traded at $26 a share two ycars ago, but_today it's

around 4 cents a shar". ETS Pay phones Inc., the third-largest PSP in the country, has declared Chapter11 .

Not all PSPs are having such diffrculty. For example, Phonetel Technologies Inc. of Cleveland, in

bankruptcy proceedingi two years ago, has recovered, said Vincent Sanduskv, president of the American

Public communications council, which boasts 1,600 PsP members.

"The decline of pay phones could stabilize and certainly reverse itself," Sandusky said. "Only 40 percent

of Americans have wireless products - that leaves 200 million without Five-and-a-half million

households don't even have i phone and only 60-70 percent of inner-city homes have them."

Kirk Reaves, president of East Coast Phones Inc. of Georgia, saw a 35 percent to 40 percent drop in

revenue and pulled 100 of his phones during the past three years. flrg declqe was due not only to

wireless phones but to "dial-around" strategies like ptrong cards or 800 numbers, which allow a*rrru111ei to use the pay phone for free. In general, the PSP and the business providing the real estate for

the phone make nothing on those calls. The Telecommunications Act of 1996 mandated compensationfor att calls but 9l l, bui the mandate has not been enforced, said Barry Selvidge, executive director of

the Georgia Public Communications Association, a PSP organization.

',We'r9 geltiry-hammere4 but we're hanging in there," Reaves said. "We're takingarilait-and-see

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Downsized dot-com workers find new employers quickly - 2000-12-18

Still, though recruiters see plentiful management opportuni_ties, job-seekers may face challenges.',Managerient is having more of a diffrcult time because of their compensation history," Mulling said.

"They're perceived at too high a net worth."

The dot-com economy is changing from one based on investors to one based on earnings and real profit.

It,s a new ball game with boards of directors dernanding that companies be more accountable tostockholders.

"Sixty public CEOs were relieved of duty in October alone," Koblentz said. "The issue of employee

disloiahon is going to continue because economies are changing fast."

The dynamic climate of this labor market has become business as usual. The average tenure of top,*"ruiiurt is less than three years, Koblentz sai4 down from eight years in the'80s and three years in'99, calling for constant flexibility.

"IT professionals tend to change jobs, staying for a 13- to^16-month time frame in permanent positions,"

saidshannon Brandon, vice piesident of field operations for Matrix Resources lnc., an Atlanta ITplacement firm. "The gap is itrinting between the tenure of a permanent person and a consultant asconsultants stay longei on assignments. We like to represent the earnings prognosis as accurately aspossible so people stay as long as they can."

Most dot-com employees are in their 20s and have only worked in a dot-com culture. The only economythey know is up and up since 1990. As they look at more secure, traditional corporate cultures, they will

trave to adjust io hierarchical structure and slower, more conservative decision-making, Multing said.

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