ETS Payphones, Inc. And Two Subsidiaries,
PSA, Inc. ETS Vending, Inc. File Chapter 11
     

Atlanta, Georgia -- September 12, 2000 -- ETS Payphones, Inc. ("ETS") and two of its subsidiaries, PSA, Inc. ("PSA"), and ETS Vending, Inc. ("ETS Vending") (collectively, the "Companies"), filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in Delaware today. The Companies are continuing to operate their businesses and manage their property as debtors in possession under the Bankruptcy Code.

ETS is headquartered in Lithia Springs, Georgia, a suburb of Atlanta. ETS is a payphone service provider operating and managing coin operated public payphones. Founded in 1994, ETS is the second largest independent payphone service provider operating more than fifty-thousand payphones in the United States, Mexico, Puerto Rico and the U.S. Virgin Islands. ETS Vending operates private automated teller machines and air and vacuum machines at various locations throughout the United States. PSA is involved in the wholesale distribution of payphones and payphone equipment throughout the United States. ETS, PSA and ETS Vending currently employ more than 450 associates.

Mr. James D. Blyth, the President and CEO of ETS, states that several factors prompted the filing for reorganization. "Recently, the payphone industry has seen a significant decline in revenue, primarily due to the increased use of 800 access numbers and 1010XXX access to the switched public telephone network.

   "The 1996 Telecommunications Act mandates that payphone service providers are entitled to fair compensation for dial around calls. After four years of protracted litigation, the U.S. District Court for the District of Colombia recently ruled that fair compensation is $.24 per call regardless of duration. Despite the Congressional mandate, under the payphone order of the 1996 Telecommunications Act, payphone service providers have had a difficult time collecting compensation due under the Telecommunications Act, which has put the entire industry in peril. The industry estimates that payphone service providers are only collecting fifty-percent of the revenue they are entitled to under the Act.

Deregulation of the telecommunications industry has provided new opportunities for the companies to negotiate with Competitive Local Exchange Carriers ("CLEC") to provide dial-tone at more favorable rates. The chapter 11 cases will allow the Companies time to conclude these negotiations.
The Companies obtained court approval to pay employees and independent contractors in the ordinary course of business and will continue to honor employee benefit packages.

Despite current obstacles, Mr. Blyth states that "the Companies' business remains viable, and provides a viable public service to the communities we service. We expect that the Companies will submit a plan of reorganization in the near future."

The Companies have retained Powell, Goldstein, Frazer & Murphy LLP of Atlanta as reorganization counsel. Young, Conaway, Stargatt & Taylor, LLP will serve as co-counsel in Delaware.