BT has confirmed that half of the 40,000 telephone boxes in the UK are to close over the next five years.
The telecoms provider has taken the decision as more than half lose money, while one in three are either not used or handle only one call within a typical month.
BT has already begun rolling out replacements in London called InLinks, which will be installed in other major UK cities before the end of the year.
The units will offer ultrafast Wi-Fi speeds of up to 1Gbps, which BT says is "the UK's fastest free public Wi-Fi service available", as well as free phone calls and a range of new digital services.
This includes mobile device charging, access to maps, directions and local services and a BT Phone Book app that enables users to search for individuals and businesses.
Each digital display will also provide real-time information relating to the area, such as the weather forecast and public transport service updates.
Since each unit will be funded by advertising revenue, they will be free for people to use.
A BT spokesperson commented: "BT is committed to providing a public payphone service, but with usage declining by over 90 per cent in the last decade, we continue to review and remove payphones which are no longer used.
"Payphone removals are carried out in strict adherence to Ofcom guidelines and, where appropriate, with the consent of local authorities."
The spokesperson added that in all instances where no other payphone is available within 400 metres, it will ask the local council for permission to remove the kiosk.