Telstra said in a statement that standard national calls and SMS from Telstra's network of more than 15,000 payphones will be made free from Tuesday, while payphones will become completely coinless from 1 October.

Telstra expects to lose around $5 million a year in annual revenue as a result of today’s announcement.

Consumers will still have to pay for any overseas phone call they make, and will be capped at six hours for a free local phone call.

Despite the majority of Australians switching to their own mobile devices, Telstra CEO Andrew Penn described the payphone as a vital part of society helping those in need.

The CEO pointed out that there are more than 11 million calls a year through the payphone system, with 230,000 of those made to critical services including triple-0 and Lifeline.

“Often, the payphone is the only lifeline people have, and they play a critical role,” he said.

The CEO continued to explain how the phones have been used to help those in need during the bushfires in early 2020.

“During the bushfires last year, I remember seeing queues of people as we made payphones free so people could access their loved ones and let them know that they were safe.”

He highlighted the need for these phones to remain free for the community during critical times.

“With that in mind, I have made the decision that we are going to make our payphones free because I know the important role they play,” he continued.

Telstra has previously made national calls on its payphones free over the Christmas and New Year period, making it easier for the homeless to contact others.

Standard national calls and SMS from Telstra payphones will be free from today, while international and calls to premium and satellite numbers will still incur a cost, Telstra said.