Pay phones to become Wi-Fi hotspots

Telstra's forgotten pay phone booths will be repurposed as Wi-Fi hotspots as part of a plan to blanket public spaces with internet.

Telstra unveiled in May a $100 million project to establish an estimated two million Wi-Fi hotspots across the country over five years.

Most will be created by Telstra home broadband customers who share their bandwidth with passersby, but the telco is also building some 8000 hotspots in public areas.

The first 100 of these will be up and running on a trial basis within weeks, said Telstra group executive of retail, Gordon Ballantyne, on Tuesday.

He also revealed that many will be repurposed pay phones.

The booths have struggled for relevance in the smartphone era, but they are ideal hotspot sites because most are located in busy areas and connected to high-speed fibre cabling.

"The use in some areas is diminishing.

"Now we're really finding a new role, Mr Ballantyne said, adding that they will still work as phones.

"We still value the payphone infrastructure and its role in the community, but we're building on that."

The hotspots will transmit internet to about a 100 metre radius, depending on the surrounding environment, with typical speeds being about two megabits-per-second.

Mr Ballantyne said 1000 hotspots should be operational by Christmas at sites that will also include Telstra shops and exchange buildings.

The trial will include busy spots such as Bondi Beach in Sydney, Bourke Street Mall in Melbourne, and Rundle Mall in Adelaide.

Popular holiday spots and parts of Perth, Brisbane, Hobart, Canberra and Darwin will also be included.

Access will be free at the trial sites.

When the network officially launches early next year, Telstra customers who agree to share their bandwidth will get free access to any hotspot, with the data they use being deducted from their home allowance.

Special routers will split their connection into two - one public and one private. Telstra maintains that their speeds will not be affected.

Non-Telstra customers, and those who don't share their home connection, will be able to connect for a yet-undisclosed fee.

Telstra stands to benefit if the program manages to free up space on its coveted 4G network by moving people to public hotspots.