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FairPoint Communications Announces Sale of Payphone Operations
May 22, 2012 (04:05 PM EDT)
CHARLOTTE, N.C., May 22, 2012 /PRNewswire/ -- FairPoint Communications, Inc. (NasdaqCM: FRP) announced today that it has agreed to sell its payphone business in northern New England to Pacific Telemanagement Services (PTS). PTS is the single largest payphone provider in the country, operating nationwide.
"Payphones have seen dramatic decreases in usage over the last decade and the trend is likely to continue," said Ajay Sabherwal, executive vice president and chief financial officer. "We believe we can best deploy our resources to focus on our core lines of business including bringing more broadband service to northern New England."
The American Public Communications Council estimates there are fewer than 500,000 payphones in the United States, down from 2.6 million in 1998, and independent payphone service providers – similar to PTS – operate 90 percent of them.
In recent years, other telecom companies have also exited this business, including Verizon, AT&T and Sprint.
FairPoint operates approximately 4,000 payphones across northern New England. The payphone business accounts for only about $1 million in annual revenue and due to the decrease in usage is becoming increasingly unprofitable.
PTS will purchase monthly access from FairPoint for any payphones it continues to operate after the deal is closed. FairPoint and PTS expect the deal will close later this year.
About FairPoint Communications, Inc.
SOURCE FairPoint Communications, Inc.