Standard national calls and SMS from Telstra's network of more than 15,000 payphones will be made free from Tuesday, while payphones will become completely coinless from October 1.

But consumers will still have to pay for overseas calls.

About 11 million calls were made across Telstra payphones in the past year, including 230,000 calls to critical services such as triple zero and Lifeline.

Telstra chief executive Andrew Penn said payphones were a vital lifeline, particularly for the homeless and people escaping an unsafe situation.

"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," he said in a statement.

"I can only imagine the relief their families feel knowing their loved one is safe."

Telstra has previously made national calls on its payphones free over the Christmas and New Year period, making it easier for the homeless to contact others.

Major Brendan Nottle of the Salvation Army labelled the decision a "game-changer" that could lift vulnerable Australians out of social poverty and isolation.

"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," he said.

Australian Associated Press