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Davel sells hotel-phone unit

Davel Communications Group Inc. has agreed to sell its hotel telephone service unit to an Oregon telecommunications company for $5-million.

"It doesn't give us the kind of growth that we had in other divisions," said Michael Kouri, senior vice president of finance and development.

Davel also said that it expects to post second-quarter profits of $850,000 to $950,000, down from the year-earlier quarter's net income of $1.1-million. Revenue is expected to fall to $11.1-million to $11.2-million from $11.6-million last year.

Davel wants to exit the hotel phone business because it doesn't get paid for many calls because users are "dialing around" the phones by using 800 numbers.

Officials are hopeful that profits will increase again after the Telecommunications Act of 1996 takes effect in the fall. The law requires that pay phone owners must get paid per call, even when 800 numbers are used, Kouri said. But the act does not allow for compensation to those who provide the telephone lines to hotel rooms, Kouri said.

The sale of Davel's hotel telephone division to Portland-Ore.-based Skylink Communications Corp. is expected to be complete in 60 days. Skylink, a privately held multimedia and telecommunications company that sells pay-for-view television to hotel guests, is interested in Davel's hotel telephone division because it will give the company a foot in the door to sell both telephone service and pay-for-view movies to more hotels.

Davel, a Tampa-based operator of 14,000 pay telephones in 21 states, bought the hotel telephone division about two years ago. It has increased the business from service to 60,000 rooms to 88,000, Kouri said.

The company plans to invest sale proceeds into its core public telephone business, "where the most significant opportunities for future growth lie," said Robert D. Hill, Davel's president.

Davel's stock, which trades on Nasdaq as DAVL, fell 37{ cents a share Friday, to $15.62{. The stock's high for the past year was $20.75 on July 1.

_ Information from Bloomberg Business News was included in this report.

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