Posted: 10/1997

The Automated Route

Software Giving IPPs Flexibility, Earning
Power

By Damon Gross

Will the payphone route of the future be
a route at all? The day may come when payphones are managed
entirely from a single location, able not only to track calls and
coin revenue, but also somehow deliver that cash, be
self-cleaning and able to roam from site to site depending on
traffic flow.

OK,so the last half of that vision is part
independent payphone provider’s (IPP’s) pipe dream and part
science fiction movie. But with technology moving nearly as fast
as an intraLATA telephone call, one can never be too sure what
kind of help is on the way. Through payphone software, IPPs can
instantly see which phones are profitable and when they are
profitable, and the software can even help them generate more
profit. Software can also let route owners know when something is
wrong with the phone, where the phone’s calls are going and how
to secure prime locations.

In short, the software that accompanies the
phones an IPP chooses to use, along with any software he might
select to accompany it, has become every bit as important as the
phone itself. The pending per-call compensation only accentuates
the significance of automation. "It’s clearly important to
have a solid, flexible tool so you can manage your payphones and
manage your business," says David Scarlett, director of
product marketing and support for Mobile, Ala.-based Omniphone
Inc.

"Over the years, payphone software has
become more sophisticated to serve a much more sophisticated
industry," says Keith Grams, product manager for Lakeland,
Fla.-based Protel Inc. "For example, in the early days,
payphone management systems captured simple coin box data to help
schedule collections." Grams says payphone software systems
have evolved to offer a wider range of features, including:

When Cornelia, Ga.-based TriNet sought management
software for its 430-phone route, it wanted a solution that
could, well, do a lot–"something that can do everything for
the payphone industry," says Chris Boseman, manager of
installation and maintenance for private payphone operations for
TriNet, "keep track of parts, inventory, what I’m spending
on service calls." The software TriNet has implemented also
allows Boseman to monitor how much money is in each phone, what
types of calls are being made (toll-free or 1-plus), or whether
the handset alarm is on, signaling that a frustrated caller has
perhaps ended his call in a not-so-gingerly manner.

If Boseman’s reports tell him that a particular
phone hasn’t taken in any coin for an extended period of time, an
educated guess tells him there is probably a coin jam. "In
24 hours if (a payphone) hasn’t made a phone call and it’s at a
convenience store or a bus station or something like that,
there’s no way that phone can go 24 hours without a coin passing
through the trigger switch."

Of course anyone even somewhat familiar with the
Payphone Compensation Order knows coins are but a fraction of the
revenue IPPs must keep track of. Fritz Range, president of
Argyle, Texas-based Oakbarn Software, notes his company’s
software can tell the user just about any figure concerning a
call, but most importantly, Range says it computes the varying
ways IPPs compensate site owners. "The basis for any of
these payphone programs is to pay commissions," says Range,
who got into the industry by writing a payphone software program
for a friend who managed a route. "And that’s quite
complicated."

While most IPPs pay according to a percentage of
total coin revenue, Range says payphone service providers often
pay their site owners in more unorthodox manners. For example,
one of Range’s clients pays the site owners along his route based
on the phone’s local exchange carrier (LEC) bill.
"Basically, it’s important to pay your commission your
way," he says. "That’s a very important feature of any
payphone software. If you’re limited in ways you can pay your
bill, you’re going to have to maybe rewrite contracts with
existing people or do commissions by hand after the fact."

Commission reports can be customized. A payphone
service provider may not want the site owner to see exactly how
many calls are made from the phone at his location or how much
total revenue is being brought in. Reports can be tailored to
show exactly what the IPP wants the site owner to see, even if
that varies from site to site. Range’s software also writes
checks with an address that fits in the window of the envelope.

In addition to accounting for revenue, payphone
software can help generate it. In its software package, Omniphone
offers a feature that allows speed-dial numbers to be programmed
into the phone. This is ideal for cab companies, tow trucks and
locksmiths–businesses that are often called from payphones. For
example, a sign on the phone says ABC Taxi can be reached by
pressing *12. The call is free to the customer, and the cab
company reimburses the IPP for steering business his way.

"Of course shopping centers like that
because they are now providing an additional service to
customers," says Omniphone’s Scarlett. "The locksmith
likes it because he gets more than his share of business because,
chances are, if it was up to people finding him in the Yellow
Pages, he might get one out of 10 calls as opposed to eight or
nine. And the provider likes it because he’s able to have his
phone there because the mall wants that feature."

In addition to helping IPPs increase their
revenue, payphone software can help ensure they are getting money
due them. The hot topic in the industry still is the Federal
Communications Commission’s Payphone Compensation Order. Once a
fair rate is re-established for toll-free calls and per-call
compensation kicks in (it was originally scheduled to begin in
October, but the order was remanded in July), IPPs are surely
going to require some way to ensure they are being properly
compensated by interexchange carriers. "Once we have to keep
track of our dial-around calls, there is going to be more talk
about it," Boseman says.

In addition to growing sophistication, the market
also demands efficiency as competition increases and, in some
cases, profit margins narrow. "Deregulation has made the
environment more competitive," Grams says. "Therefore,
PSPs need more features in their software that allow them to
operate their businesses more efficiently." This means the
ability to know which locations are the most or least profitable
so that phones aren’t kept in locations where they aren’t making
any money.

Scarlett gives the example of an airport, with as
many as 300 payphones. Detailed call reports can give an IPP an
indication of where these phones should be placed for optimal
return.

In addition to more payphones, there are more
phones in general, which in turn requires additional area codes.
In just a couple of minutes, an IPP can activate a new area code
for whichever phones require it, according to Diloue Barker,
director of operations for Universal Communications Inc., in
Cornelia, Ga.

Whether payphones are placed in an airport, at a
strip mall or convenience store, there are some factors IPPs must
consider when selecting their software package. "Look at how
you run your business," Grams advises. "Define your
needs and shop for software solutions that best meet those
needs."

Cost obviously will be a factor, but Scarlett
recommends considering cost-effectiveness. An intricate system
might be worth the money if it helps manage a 1,000-phone route,
or if it helps secure some of those locations. Some small routes
may require only a minimal software system. "IPPs need to
look at each location and determine which phone provider or
platform vendor they should use," he says. "What’s
going to bring the biggest return for the lowest cost?"

Scarlett says it is quite common for IPPs to
utilize software from several different manufacturers, which
brings up the next question: Will payphone software ever be
written to interface automatically with that of the competitors?
Scarlett says most payphone software companies could do so, but
it would require companies exchanging information, much of which
is confidential. "Why is it proprietary? Because you feel it
gives you an advantage over competitors," he says.
"You’re just not going to be too apt to share your
competitive information."