The government’s deal with Telstra to maintain public telephones costs taxpayers up to $50,000 per phone per year, according to estimates in a draft report from the Productivity Commission that could lead to more communications funding for regional areas.
The agreement, signed in 2011 and lasting until 2032, is worth $44 million per year and is part of the government’s policy to provide equitable access to communications.
It recommends the existing agreement to be phased out “as soon as practicable”.
Calls from payphones have dropped from approximately 50 million per year in 2012 to 15 million in 2015.
The report notes that there is no requirement for Telstra to specify which payphones actually require a subsidy and that increasingly Telstra is using the payphones to provide a wi-fi service to its customers.
The Productivity Commission estimates the annual average subsidy for payphones as between $2500 and $50,000 per booth.
Immediately cutting payphone funding would allow "for a better targeted allocation of funding to areas of genuine need for some form of community-based telecommunications service”, the report states.
Telstra released a statement in response to the report noting “we support the Commission’s view that the Government should consider whether the ongoing payphone obligation is delivering the best value to Australian consumers and communities".
Telstra removed 523 payphones in 2015-16 and made 102 new installations. It currently maintains about 17,000 payphones, with other company running approximately 8000.
Just two per cent of Triple Zero calls in 2014-15 originated from payphones.
Communications Minister Mitch Fifield declined to comment on whether he would renegotiate the deal with Telstra. He said the final report, scheduled for April 2017, "will provide the Government with information and advice for its consideration".
