Telecom : Managing your payphones

Many businesses have on-site payphones. The local phone company either owns the phones or they are customer owned. If the local phone company owns the phones, then the business owner normally pays a monthly fee to the local phone company for the payphone. The payphone bill is almost identical to a local bill for a regular business phone line. The charge for the payphone is usually about the same as the charge for one flat business line: about $40 per month.

Eliminating payphone bills
The problem with paying the local phone company to have a payphone at your site is that you are paying the company so it can earn money from your employees. Not only does the carrier earn $40 a month from you, but it gets all of the coin revenue and probably receives a commission on all operator-assisted calls, collect calls, calling card calls, and long-distance calls from the payphone.

- The “$4 rule” has long been a standard with payphones. If the payphone is earning $4 or more per day in coin calls, then the local phone company will discontinue billing you the monthly fee and instead will pay a commission on the calls.

- A typical business has multiple payphones at one facility. If most of the payphones are meeting the $4 minimum, then an overall commission agreement may be negotiated with the local phone company. Commissions on payphone calls vary from 5% to 25% of both the coin and long distance revenue. The commission checks are usually paid monthly or quarterly.

- If the local phone company is unwilling to waive the monthly fee for the payphone due to the low amount of calling, you may consider canceling the service altogether. If you have multiple payphones in one location that are not producing significant call volumes, consider reducing the number of phones until the $4 minimum is met.