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19 June 2017

Payphones will could be dead by end of 2017: Productivity Commission

One of Telstra’s 17,093 payphones. A new Productivity Commission report recommended reducing funding to public telephones. Picture: Bloomberg

THE payphone could be dead by the end of the year after the Productivity Commission recommended cutting funding to payphones “as soon as practicable”.

The Productivity Commission has argued that payphones can “no longer be justified” in an age of smartphones.

But consumer groups and Telstra defended public phones, arguing that abandoning payphones could leave regional communities, vulnerable Australians, and travellers without lifelines.

The payphone could be dead by the end of 2017. Picture: Andy Rogers

The payphone could be dead by the end of 2017. Picture: Andy RogersSource:News Corp Australia

The recommendation to cut $44 million spent on payphones each year came as part of the Commission’s inquiry into telecommunications universal service obligations, which force Telstra to provide standard telephone and payphone services to all Australians regardless of their location.

READ MORE: Have consumers been ‘misled’ on NBN speed claims?

The report found the law, introduced in 1999, was “anachronistic and costly” now the National Broadband Network was scheduled to provide homes with telephone services by 2020 and Australians were “well served by mobile networks”.

It was particularly scathing of payphone funding, which it said should be renegotiated this year.

The 20-year contract, which has a net value of $3 billion, is set to run until 2032, and means the country’s major telco receives millions in funding to ensure those who aren’t catered to by the market have access to a standard telephone service.

“With regard to payphones, there is a strong case for winding back Telstra’s contractual obligations as soon as practicable,” the Commission found.

“The evidence of the demise of payphones is clear.”

The number of payphones in Australia has dropped significantly over the last decade.

The number of payphones in Australia has dropped significantly over the last decade.Source:News Limited

The number of payphones in Australia has dropped from 49,862 a decade ago, according to the Australian Communications and Media Authority, to just 24,573 in June last year.

But Australian Communications Consumer Action Network chief executive Teresa Corbin said the Federal Government should consult the community before signing a death warrant for payphones.

“We need to make sure we don’t leave out people who are homeless and can’t charge their phones, people who are travellers, and people who rely on payphones in emergencies,” Ms Corbin said.

“We’re not keen to move away entirely from payphones. We think it’s too soon.”

Ms Corbin said some Australians in remote and regional areas still used public telephones for reliable communication.

A Telstra spokesman said the Government should review its commitment to payphones but some were still in popular use.

Telstra operates more than 17,000 payphones in Australia, but many restaurants and shopping centres also operate their own. Picture: News Corp Australia

Telstra operates more than 17,000 payphones in Australia, but many restaurants and shopping centres also operate their own. Picture: News Corp AustraliaSource:News Corp Australia

“We support the view that the Government should consider whether the ongoing payphone obligation is delivering the best value to Australian consumers and communities,” he said.

“However, there may be payphones in some areas that are still valuable to communities so alternative solutions for these areas will need to be a part of any change.”

The Productivity Commission report did not rule out funding any payphones in future, however, as it recognised as many as 90,000 premises did not have “adequate mobile coverage” and people with disabilities, life-threatening illnesses, and older people who were not comfortable with new technology could be disadvantaged.

The report also recommended minimum broadband speeds be introduced to future universal service obligations for the NBN, and that is should report “the reliability of its networks”.

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