The telephone giant, which is selling and then leasing back its property portfolio and possibly its vehicle fleet, says the mobile initiative will pay for maintaining its phone box network.

Phonebox Facts

First one: 1884 141,000 in the UK 2m calls a day 15% of 999 calls 45% Childline calls Vandalism: �1m Theft costs �6m Min charge 20p

It said it would make space available in its street-side payphone boxes for low powered, localised transmitters.

The firm said the move would increase coverage and cut the number of blackspots for existing services and for third-generation mobile phone services.

BT said 1,020 locations would initially be available, rising to 5,000 next year.

There have been considerable and growing health concerns about mobile phone masts in the UK.

Money boxes

BT claimed that its initiative could mean fewer large transmitters were needed.

Earlier this year British Telecom called a halt to the expansion of its 141,000 network of public telephone boxes, saying that the growth of mobiles had sent usage tumbling by more than a third in two years.

BT has already taken steps to recoup some of the lost income from phone boxes by increasing the minimum cost of a phone call to 20p.

The firm has also launched initiatives such as selling advertising on the glass panels.

Another measure being rolled out at the moment is the launch of multi-media phones, which can by used to surf the internet, send emails or text messages.