Removal from credit report

Right now, the debt sounds valid and it is hurting your credit. Your best move is paying the debt and get your account marked as "paid collection" This will improve your credit slightly from the present because it is already in collections.

Make sure that you pay to this company authorized for collections. They have to give you all info about the debt and list the breakdown of the total amount. After the debt is cleared, get the PIF from the collector and see your file updated with the bureaus.

Contacting the original creditor, the phone company, is the best way to start. Let them know you never received a final bill and did not realize you owed. They do have the ability to take payment still and contact the collection agency to clear things up. You just need to find the right person there who is willing to help.
The original creditor is almost always easier to deal with.
Paying a collection does not help your score. The fact that you had a collection is harmful, paid or not. Call the phone company and if you dont get the results you want, keep calling. It works.

Each credit reporting has a form that you can fill out that they can investigate the debt because some of the creditors will not do it themselves.