A self-contained, pre-pay coin operated telephone wherein when the user removes a handset from a switchhook, a local dial tone is generated, prompting the user to enter a telephone number of a called party. Once the first digit of that telephone number has been entered, the locally generated dial tone is removed and the user completes the entry of the telephone number. Once the proper coin has been deposited, the internal computer causes the telephone to couple itself to a central office. The telephone number entered by the user is then sent to the central office under control of the internal computer. During this time, the microphone in the handset is muted such that the user cannot communicate through the telphone. Once the user hears the called party answering, then the user must actuate a push-to-talk switch to indicate to the computer that the party has answered. Once this occurs, the muting is disabled allowing the user to speak to the called party and deposited coins are retained at the termination of the call. If the call is terminated without the push-to-talk switch being actuated, then deposited coins are returned to the user. Restricting incoming calls to prevent the user from accepting collect calls is accomplished by the phone answering the incoming call of approximately one second, then automatically dropping the incoming call, thereby readying the telephone for initiation of an outgoing call. Alternatively, a minimum charge, or no charge, can be required to answer an incoming call.
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