PhoneTel Technologies Reports First-Quarter Results.

CLEVELAND--(BUSINESS WIRE)--May 15, 1998--PhoneTel Technologies, Inc. (AMEX:PHN) today reported financial results for its 1998 first quarter, which ended March 31, 1998.

Revenues for the first quarter of 1998 were $24.1 million, a decrease of 13 percent from $27.7 million for the same period in 1997. This decrease in revenues was due principally to a decrease in local call volume, offset in part by an increase in the local coin call rate, a decrease in operator service revenue, and a decrease in the per call dial-around compensation rate under the FCC's October 7, 1997 Second Report and Order.

Operating expenses for the 1998 first quarter increased $1.4 million from last year's first quarter principally due to an increase in the number of installed pay telephones, to increased charges by local exchange providers for end user common line charges, PICC charges and fees related to the Universal Service Fund, and to increased selling, general and administrative expenses.

Depreciation and amortization for the first quarter of 1998 increased $1.0 million from the first quarter of 1997 principally due to acquisitions and expansion of the Company's pay telephone base.

First-quarter interest expense for 1998 increased $0.9 million from 1997 because of increased debt.

First-quarter 1998 EBITDA (earnings before interest, taxes, depreciation and amortization, and other unusual charges and contractual settlements) was $2.7 million, compared with $7.7 million in last year's first quarter.

The net loss for the first quarter of 1998 was $8.2 million, compared with $1.1 million in the same period last year. On a per share basis, the first-quarter net loss was $0.51 for 1998 and $0.09 for 1997. -0-

           PhoneTel Technologies, Inc. and Subsidiaries
         Condensed Consolidated Statements of Operations
     (In thousands, except for share and per share amounts)

                                               (Unaudited)
                                       Three Months Ended March 31,
                                          1998             1997
                                      ____________     ____________

Revenues                                  $24,123          $27,658
Operating expenses                         21,384           19,989
                                      ____________     ____________
EBITDA (a)                                  2,739            7,669

Less:
 Depreciation and amortization              6,306            5,296
 Interest expense-net                       4,442            3,521
 Other unusual charges and
  contractual settlements                     143              ---
                                      ____________     ____________
Net loss                                  ($8,152)         ($1,148)
                                      ____________     ____________
                                      ____________     ____________
Earnings per share calculation:
 Preferred dividend payable in kind          ($97)           ($147)
 Accretion of 14% Preferred to its
  redemption value                           (231)             (50)
                                      ____________     ____________
Net loss applicable to common
 shareholders                             ($8,480)         ($1,345)
                                      ____________     ____________
                                      ____________     ____________
Net loss per common share                  ($0.51)          ($0.09)
                                      ____________     ____________
                                      ____________     ____________
Weighted average number of shares      16,535,846       15,525,902
                                      ____________     ____________
                                      ____________     ____________

(a) EBITDA includes operating income before interest expense-net,
depreciation and amortization, and other unusual charges and
contractual settlements.


       Condensed Consolidated Balance Sheets (in thousands)

                                     March 31, 1998     December 31,
                                       (unaudited)         1997
                                      ____________     ____________

Current assets                            $24,768          $23,769
Property and equipment                     29,021           30,109
Intangible assets                         112,218          115,607
Other assets                                  478              341
                                      ____________     ____________
 Total assets                            $166,485         $169,826
                                      ____________     ____________
                                      ____________     ____________

Current liabilities                       $17,814          $15,930
Long-term debt                            153,122          150,222
14% Preferred stock                         8,044            7,716

Non-mandatorily redeemable preferred
 stock, common stock, and other
 shareholders' equity (deficit)           (12,495)          (4,042)
                                      ____________     ____________
 Total liabilities and shareholders'
 equity (deficit)                        $166,485         $169,826
                                      ____________     ____________
                                      ____________     ____________

CONTACT: PhoneTel Technologies, Inc.

Tammy L. Martin or Richard P. Kebert, 216/241-2555