Saving money by using a customer-owned payphone

Besides using a payphone provided by the local phone company, a business may decide to use a private payphone company, or purchase and install its own payphone. Either way, the principle is the same. Many convenience store chains use private payphone companies such as the People’s Telephone Company, one of the largest private payphone companies.

The private payphone company installs and maintains its own payphone at the convenience store. If the local phone company already has a payphone on-site, which is usually the case, the private payphone company requests that it be removed. The local company will require a letter of agency signed by the site owner prior to honoring any of the private company’s requests.

Once the old payphone is removed, the private payphone company orders a line from the local phone company and physically connects its payphone to the line. All installation costs should be absorbed by the private payphone company. The company should also pay the $40 bill for the line each month.

Before removing its payphone, the local phone company will probably send a sales representative out to the site owner to try to convince him not to change anything. Most of the time it is too late, because private payphone companies usually sign 5-year contracts with their customers prior to contacting the local carrier. Customers considering signing one of these contracts should contact their local carrier first. If the local carrier can offer a similar commission check each month, then the site owner should not change. Local carriers normally offer commissions on coin revenue only, not long-distance revenue.

As expected, the private payphone vendor will pay the site owner a monthly commission on both the coin calls and long-distance calls. To handle all of the operator-assisted calls and long-distance calls, the private payphone company contracts an OSP, such as AT&T, Sprint, or Opticom, one of the leading independent OSPs.