Telstra has lost a bid to turn its increasingly redundant city phone booths into “whopping big TV screen” electronic billboards.

Faced with diminishing demand for fixed-line calls from old-style telephone booths on city pavements, the telco giant devised a plan to make them pay by converting the booth’s exteriors into advertising cash cows, potentially earning it $9.5 million a year.

Many city phone booths already carry two-metre advertising hoardings, but the telco wants to turn them into bright, backlit electronic versions that can flip ads on a 30-second basis.

Telstra applied to City Hall, through an advertising subcontractor Adbooth, to turn 23 telephone boxes on Melbourne’s best known streets – from Elizabeth to Exhibition – into digital billboards.

Council papers reveal this is Telstra’s second attempt at converting its old booths into flashing digital billboards.

“If the booths are the same as what I advised on last year, i.e. a separate whopping big TV screen, this may be an issue,” Melbourne Council legal officer Toby Hayes said.

The electronic billboards would be worth up to $8000 a week each, Quattro media buyer’s director Libby Shaw estimates, but the telco giant’s hopes of generating extra revenue have been dashed: City Hall rejected its bid.

The phone ads would hinder “way finding”, distract pedestrians and add to “visual clutter”, council said.

Telstra’s fixed-line booths in the central city are generally in premium locations on busy pavement thoroughfares such as Bourke Street (with eight booths) and Collins Street (with four).

Legal advice provided to Telstra suggests the billboards could be installed without a permit but the telco would need approval from City Hall before they could be turned on to run third party ads.

Booming mobile phone use has sounded the death knell for city and country telephone booths and for fixed-lines generally.

At least one-third of Australians now use a mobile phone only, with no fixed-line telephone at home, according to the Australian Communications and Media Authority.

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