LETTER AGREEMENT

                                 Exhibit 10.18

                                                               LETTER AGREEMENT

                                January 27, 1997

Xx. Xxxxxxxx Xxxxxx
Peoples Telephone Company, Inc.
0000 Xxxxxxxxx 00xx Xxxxx
Xxxxx, XX 00000-0000

Dear Xx. Xxxxxx:

     This is to confirm the offer of Peoples Telephone Company, Inc. ("Peoples")
to extend  the term of the  Employment  Agreement  dated June 22,  1994  between
Peoples and yourself (the "Agreement") for six (6) months.

     The effect of this  extension is that the Term of Employment (as defined in
the Agreement) will expire on December 31, 1997.

     All other terms of the Agreement remain unchanged and in effect.

     This Letter Agreement contains all obligations and  understandings  between
the parties and merges and supersedes all prior  discussions,  negotiations  and
agreements, if any, between them relating to its subject matter.

     If you agree to the aforementioned change to the Agreement,  please sign in
the space provided below and return this letter to me.

                                Very truly yours,

                                PEOPLES TELEPHONE COMPANY, INC.


                                By: /s/ E. Xxxxx Xxxxxxx
                                E. Xxxxx Xxxxxxx
                                President and Chief Executive Officer
Agreed and Accepted
this 3rd day of January, 1997:

/s/ Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx
Executive Vice President/President - National Accounts