AT&T has signalled the death knell of the pay phone around the world by announcing that it plans to exit the pay phone business by the end of 2008 across America.

According to the phone giant, the company says it plans to phase out both public pay phones and phones provided under contracts at government correctional facilities through the end of next year forced by the popularity of mobile phones.

The move affects AT&T pay phones in the company's traditional 13-state service area.

Pay phones in the United States have declined across the industry from about 2.6 million phones in 1998 to an estimated 1 million phones today.