In the past year around 11 million calls were made across Australia from the 15,000 Telstra payphones spread throughout the country.

"For many Australians, the availability of a payphone is a vital lifeline," Telstra CEO Andrew Penn said

Mr Penn said they were especially vital for the vulnerable, including the homeless, people who are isolated, or someone escaping an unsafe situation.

Mr Penn said this decision meant everyone could now use payphones to make a free local or national call to a standard fixed line, or a call to an Australian mobile, when they needed to.

"I have been moved seeing firsthand queues of people waiting in line to use a payphone to tell their family and friends they're safe after a bushfire, a cyclone or some other natural disaster has taken the mobile network down."

The initiative builds on Telstra's five-year program of providing free national calls on its payphones during the Christmas and New Year period where it worked closely with the Salvation Army.

"The reality is this piece of infrastructure is absolutely critical because a lot of Australians either don't have a mobile phone, lose it or the phone's charger, or simply run out of credit," Salvation Army Major Brendan Nottle said.

Whereas standard national calls and SMS are now free, international and calls to premium and satellite numbers will still incur a cost.