Phone booths are still needed at places tourists frequent — such as Toronto's Pearson International Airport. (R.A. Hickey)
The death of pay phones has been greatly exaggerated.
They can't take photos, play videos, send e-mails or travel - like cellphones, their sleeker, technologically advanced counterparts - but while pay phones are a dying breed, they won't be extinct any time soon, industry analysts say.
They're evolving with the times, adding new features such as wireless internet access and capabilities for the hearing impaired, and even allowing users to make phone calls for free.
Pay phones going down, cellphones on the rise
Since the Canadian Radio-television and Telecommunications Commission deregulated the pay phone market in 1998, the number of pay phones has steadily declined. That year, the CRTC decided to allow new competitors to enter the pay-phone market. But the commission put in a few safeguards: new pay phones had to match existing services, including 911 calls; while the rates of new entrants aren't regulated, existing pay telephone companies' rates still are, which establishes competition.
The CRTC said the changes would encourage innovations in service, foster a viable domestic industry, and increase total market revenues. Pay phones operated by companies other than long-time players Bell Canada and Telus have begun popping up across the country. As of 2002, more than 350 potential pay phone service providers had registered with the commission. But the increased affordability and popularity of cellphones hit the pay-phone market hard. Profits have dropped steeply, with toll revenues dropping 17 per cent annually. As well, the number of pay phones has dropped by about three to four per cent a year. In 1998, there were about 185,100 pay phones in Canada. By 2002, that figure had dropped to 157,000.
Pay phones by the numbers:
Telus
- In 1999, they had about 37,000 pay phones.
- In 2003, they had about 33,000.
- In 2006, they had about 29,500.
- In 1999, they had about 100,000.
- In 2006, they had about 85,000.
- They have about 15,000 pay phones.
- The number has been fairly consistent, rising and falling about three per cent annually.
- They have about 2,000 pay phones.
- The number has stayed consistent since they entering the market in 1999.
Number of cellphones in Canada
The number of Canadian cellphone users has grown exponentially - to more than 16.6 million in 2006 from 100,000 in 1987, according communications consulting firm Yankee Group. And many Canadians cut their ties to land lines completely: cellphones were the only lines in 570,000 Canadian households in 2006, about 4.5 per cent of Canadian households, Statistics Canada reported. This is more than double the figure just two years earlier.
Albertans are leading the trend, with 75 per cent of provincial households owning a cellphone, the highest rate in the country. Ottawa is the most wireless city, with 80 per cent of households having a cellphone.
Some households can't get enough. As of 2005, 40 per cent had one cellphone, 20 per cent had two cellphones, and seven per cent had three or more. With the Canadian Radio-television and Telecommunication Commission announcing in February 2007 a new service that will allow consumers to keep their numbers even if they change service providers, cellphones are likely to become increasingly popular.
Cellphone users by the numbers:
- In 1987, there were 100,000.
- In 2001, there were more than 9.5 million.
- In 2002, there were 11.6 million.
- In March 2006, there were 16.6 million, or 52 per cent of Canadians.
- In 2010, the Yankee Group predicts there will be 21.7 million, or 65.4 per cent of Canadians.
But Jeff Leiper, a director at Yankee Group, said although cellphones are becoming increasingly popular, there's a swath of Canadians who aren't interested in the technology. Even in 2010, Yankee Group predicts one-third of Canadians will still be making calls away from home with a quarter in hand, in a phone booth.
"For those folks, pay phones continue to be an important part of how they communicate," Leiper said, adding that non-mobile users tend to live in rural areas, are older, and have lower incomes.
The popularity of cellphones in Canada is lower than in the rest of the industrial world, Leiper said. In countries such as Sweden and Korea, more than 90 per cent of people have at least one cellphone, he said.
"But in Canada, where we lag, the need [for pay phones] is still pretty clear," Leiper said.
Pay phones an essential service
Paulo Pasquini, a spokesman for Bell Canada, said pay phones are required to back up cellphones.
"We have all had our instances of cellphones crapping out or losing their charge," Pasquini said. "[Pay phones] are needed as an emergency tool, and in some places, where cellphone service is unavailable."
Shawn Hall, spokesman for Telus, which operates pay phones in B.C., Alberta and Quebec, agreed.
"They're definitely declining, but they remain important," he said.
Pay phones are still needed in areas frequented by tourists, such as bus depots, airports and ferries and public places such as schools and hospitals, Hall said, adding they're important in low-income neighbourhoods.
Similarly, Brenda Reid, public affairs manager for Bell Aliant, noted that pay phones will likely always be around, even if they don't make much money, because they're necessary for emergency situations.
"The perception is that they're disappearing but we still have 13,000 to 14,000 in Atlantic Canada," Reid said. "They've gone down somewhat - about 5 per cent - but they're not disappearing yet.
"I really wouldn't expect them to disappear altogether because there will always be a need," she said, noting that vandalism is one of the top reasons to uninstall a public phone. "It seems like everybody carries a cellphone but that's not true."
Although pay phones have been disappearing, Hall said, they haven't been proactively removed. Pay phones disappear through attrition, he said. If one is broken or damaged, the company decides whether to fix it after consulting the community or owner of the property where the phone is located, and looking at whether there's a pay phone within a reasonable distance, Hall said.
"There are some pay phones that hardly see any use. There are some pay phones that remain popular.… We're hesitant to remove them all because of a legitimate demand from real users," Hall said.
For this reason, in 2004, the CRTC stepped in to make sure pay phones would always be available to those who need them. After hearing from the public - including submissions from telecommunications companies and public interest advocates - the CRTC decided that pay phones are an essential service for Canadians. They didn't force telecommunications companies to provide pay phones, but put in a clause to protect them. If the last pay phone in a community is to be removed, the telecommunications company must notify everyone in a high-profile way, such as by running newspaper ads.
New technology: more than just phone calls
What is changing is the way pay phones look.
"You used to see a row of pay phones, now you might see only one," Hall said.
Their capabilities are changing too. Phones now take credit cards, have internet ports and some are specially equipped for the hearing impaired.
Free Fone, a subsidiary of Canada Payphone, is slowly adding phones that provide free calls and create hotspots for free wireless internet access. These phones pay the bills by showing ads on a digital screen on the unit.
There are about 600 Free Fones across North America, including 50 in Canada, mainly on university and college campuses. Free Fones are used more often than Canada Payphone's regular pay phones - about 500 calls daily versus five to 10 calls a day, said Anthony Lacavera, CEO of Globalive Communications Corp, which owns Canada Payphone.
Lacavera said his firm is trying to partner up with the bigger players in the pay phone market to try to replace pay phones with Free Fones. He agrees that pay phones are an essential service, but the regular 25-cent pay-phone business is not profitable for the long-term.
"[Free Fones] really is a logical evolution of the business," Lacavera said.
A chunk of Canada Payphone's users are people who have cellphones, but want to save on charges for extra minutes, he said.
But Leiper said as cellphone rates come down, the compelling case for a free phone seems to disappear. Although cellphone fees are higher in Canada than in other developed countries, he said, the buckets of minutes they get now are large and will get larger.
The newest phone booth doesn't have a phone at all — the Cell Zone is a quiet place for cellphone conversations. (Jennifer George)
"Currently, in the very short term, there are still Canadians who are looking at their cellphones' minutes, but it is increasingly less of a consideration," Leiper said. Enter the phoneless phone booth.
Cell Zone is a soundproof booth for cellphone users, offering a quiet environment to chat in nightclubs, restaurants, libraries and other entertainment venues. It also muffles cellphone conversations to keep from disturbing others.
Tony Ferranti, vice-president and founding partner of Salemi Industries, the Massachusetts-based company that created the Cell Zone, said they got the idea after being bombarded by other people's conversations during a night out.
"We've gone to dinner with our spouses and friends and became aggravated listening to other people's cellphone conversations.… We thought, 'Wouldn't be great to have a place to have a quiet conversation?'"
After some research, Salemi Industries launched the Cell Zone in May 2006. It's a futuristic-looking upright tube with a sliding door that stands just a bit more than two metres high, but ranges in diameter from 76 centimetres to 1.7 metres. It costs about $2,500 to $3,500 US, depending on size and colour.
It can block out noise between 30 and 40 decibels, depending on where the Cell Zone is located and the type of noise. (By way of comparison, Ferranti said, a loud office with everyone talking on the phone has a level of 40 to 50 decibels.) Nothing can be heard outside the booth, he said.
Ferranti said there are no Cell Zones in place yet, but there have been more than 6,000 inquiries. Ferranti said with cellphone use increasing and one million pay phones taken down in the U.S., according to the Federal Communications Commission, the Cell Zone could nudge the pay phone out.
"I truly believe these cellphone booths will take them over," he said.
RELATED
External Links
- Canada Says Hello:
- The First Century of the Telephone
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