A feud between Telstra and local councils over new, nearly 3m tall phone booths is set to head to the federal court on Wednesday.

Telstra is attempting to renovate 1,860 payphones and install large LCD advertising screens, wifi, phone charging ports and other features.

But now the City of Sydney, City of Melbourne and City of Brisbane councils will face the telco in court after they blocked the installation of the booths, calling them “a Trojan horse for advertising” and a public nuisance.

Melbourne councillor and chair of planning Nicholas Reece says the new booths – which are 2.7m tall and 1.2m wide – will create congestion on busy footpaths.

“I’m 6 foot 3 and it towers over me,” Reece said. “The footpaths of Melbourne and Sydney are precious, and these massive new structures are taking up a lot of space, and creating congestion.”

Sydney’s lord mayor, Clover Moore, described it as “a craven attempt” to make a profit from “already crowded CBD footpaths”.

“Telstra has removed pay phones from other areas across the country, publicly citing a lack of use,” she said. “Installing new payphones in the CBD is not about providing utility, it is a Trojan horse for advertising.”

Under the federal Telecommunications Act 1997, Telstra does not need council approval to install booths that are defined as “low-impact”. However, the Sydney and Melbourne councils believe the larger phone booths are no longer “low-impact”.

Telstra first announced the new booths in 2017 as a partnership with outdoor ad company JC Decaux.

In 2019, the City of Melbourne refused 81 applications for the booths, and started proceedings in the Victorian civil and administrative tribunal to try and have them defined as not “low-impact”.

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In May, Telstra then began proceedings in the federal court against the City of Melbourne to overturn this. On 25 June, the Sydney and Brisbane city councils joined the case as co-respondents.

Telstra is obligated under law to provide payphone services.

“The utility of those public payphones is debatable in the modern era, when over 80% of Australians have mobile phones,” Reece said.

“These are monstrous electric billboards masquerading as payphones. They are not part of telecommunications services, they are part of a revenue strategy for Telstra.”

Reece said the new booths were 50% bigger, and Telstra had just “bolted a huge, supersized electronic billboard on the back of the payphone”.

But Telstra has defended the new payphones, saying the screens will also be used to provide emergency alerts, weather and tourist information, and make them more accessible.

The company says on its website the new booths in Melbourne are only 15cm wider than the old ones.

“A concern has been raised about the size and location of our new payphones,” it says. “We acknowledge there has been a small increase in size, mainly to accommodate the fibre connections and other equipment required in a modern smart city.

“In most cases the new payphones will be installed in non-pedestrian thoroughfares and within the lines of other existing street furniture like seats, trees and bins … The new pay phone booths have also been designed to reduce pedestrian impact by adding height over width.”

A Telstra spokesman added: “This is the first major redesign of the payphone booth since 1983.”

“Like many outdoor facilities, including bus shelters and other street furniture, payphone booths have long been used to display advertising. We have had Telstra-specific advertising on over 10,000 payphones nationally since 2005.”

The spokesman said Telstra had brought the federal court action so the company and councils could have “one judgment that applies across Australia”, rather than in every state.

“We are committed to working with all councils to address any issues and are committed to installing all payphones correctly. We are not aware of any new payphone sites that have been installed without full authorisation.

Telstra has over 16,000 payphones across Australia, and they are used to make 13m calls a year.

Telstra provided its submissions to the federal court on 11 October, and Melbourne and Sydney city councils provided theirs on 18 October.