This week BT PLC (formerly British Telecommunications PLC) (NYSE: BT) got lots of favorable coverage for relenting on its plan to remove thousands of iconic red phone boxes. BT announced in June it wanted to replace about one-third of its remaining 12,000 red phone boxes. The company has slowly been dispatching the boxes for years, prompting small local protests all along and a big outcry this summer. BT proposed a new deal: for £1 a town could keep the box, but with no working phone. A working phone would cost £500 ($900) a year. According to The Telecom, BT says £500 ($900) pounds is only half the annual cost of operating a red phone box. Really, $1,800 a year to maintain a pay phone? This July, residents in Cornwall were told their phone, which had been broken since June, wouldn't be fixed till late August. In protest, they strung up a bunch of tin cans on strings inside the booth.
BT has long complained that cellphone service is eroding the profitability of pay phones. In 2006 it raised the minimum charge to 40p (72 cents), saying only a third of the boxes were profitable. BT's plan to make pay phones profitable again is to replace phone booths with big illuminated advertising billboards, which it claims will reduce street clutter. The City of Westminster (a borough of London) disagreed and disallowed them. After testing these £2,000 new phones on Buckingham Palace Road, they found them an "unduly intrusive element in the street scene." BT's arrangement with French advertising firm JCDecaux is murky, but Brand Republic reports that it's a five-year, £75 million deal to put ads on 50,000 phones. Let's do the math: That amounts to £15,000 a year or £300 a year per phone for putting up ads. Why couldn't BT give town councils the same £300 deal?
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