"The big decrease in public payphone usage is behind us," says Francois Germain, France Telecom's executive vice president in charge of advanced services and payphones. "Figures from our modelling show that in the future we are going to reach a point where usage levels stabilise."

Quite when the tide will turn remains to be seen. Along with other former national telephone monopolies, France Telecom, which retains a public service obligation to provide call boxes, has experienced a dramatic slide in its payphone business as more and more of its customers have acquired mobile phones.

In the past four years, usage of the 183,000 France Telecom payphones in France has fallen 30 per cent. The speed and scale of the decline has led the company to mount intensive studies into why and how people use payphones.

Under the 1997 regulations instituted before the part-privatisation of the one-time state operator, France Telecom is obliged to provide only 45,000 payphones in France.

To ensure people can easily call the emergency services when necessary, and that those without phones at home can make calls when they need to, France Telecom is required by law to provide at least one call box in every village with less than 1,000 people. For every additional 1,500 people, it must provide another telephone. In practice, this universal service obligation is fulfilled by a network of 70,000 call boxes, well over the legal minimum.

In France, as elsewhere, any decision to scale back the call box network overnight would lead to political outrage and a public relations disaster.

In practice, Mr Germain says, the overall number of payphones has been gently reduced in recent years. But that has been accomplished as part of an ongoing process of reviewing sites and setting up new booths as appropriate to optimise revenues and combine best service, best place and the right content.

Payphones can be profitable. Two rivals, 3cCom and Safter, also provide payphones in prime locations, although France Telecom remains overwhelmingly the dominant operator.

The overall usage decline disguises some surprising trends. In many city centre and transport terminus locations, for example, the volume of usage per telephone has multiplied three or four fold. So, typically, the company is able to weed its payphone network and reduce costs by taking out one or two payphones from a cluster of three of four without any marked loss of revenues.

"Strategic locations can change as a function of changes in the way of life of our customers," Mr Germain says. "So this sort of re-location is good for our business, and good for our customers."

In fact, France Telecom research shows that only 7 per cent of payphone users are people who have no alternative telephone. Typically, many of these people live in poor inner city areas, and, says Mr Germain, "they are customers we care about". These users also include students in college residences, hospital patients, and so on.

A second group, into which 45 per cent of users fall, comprises people who have a mobile, but sometimes choose to use a payphone instead.

Many users, he says, will have a mobile to receive calls when out and about, but will find a payphone to return calls - particularly if they are going to be protracted, or long-distance - because the payphone is likely to be cheaper. Such people account for 20 per cent of all French payphone traffic.

Another 24 per cent of users have a telephone at home, but use prepaid smart cards to make certain types of calls from payphones. These so-called Scratch cards can give rise to big call discounts particularly if used to call a specified overseas country.

Until about 12 months ago, such cards could be used in France only when calling from a payphone, but now that they can also be used from home telephones, some of that traffic has migrated away from the payphone network.

A second variety of so-called universal calling cards, which enable the user to call any destination, has enhanced the simplicity and convenience of using call boxes, but offers little advantage over alternative fixed-line phones in terms of cost. Overall, 48 per cent of payphone users have a prepaid calling card.

These cards have now been complemented by the introduction by France Telecom of telephone accounts that enable users to charge calls to their home account no matter where they call from, adding to the attractions of payphone use for those on the move.

And, of course, 85 per cent of users make payphone calls from time to time because they have no alternative - perhaps to report a fault on their home phone, arrange a pick up from an airport whilst travelling, and so on.

Despite the spread of mobile phones, and the falling cost of mobile calls, increased mobility and the flexibility of prepaid calling cards will underpin the future of call boxes, says Mr Germain. But equally critical are developments that ally call box technology to that of online electronic transactions.

France Telecom is working hard to develop enhanced services based upon this convergence. One such development is the introduction of 1,500 internet public access kiosks. Located at universities, airports, and so on, these offer 18 thematic "bouquets" of information tailored to the perceived needs of the target user group, along with facilities to call a taxi, or book cinema tickets online, for example.

Other studies are looking at extending the use of payphones - for example, to pay domestic bills, or recharge payphone cards or an electronic purse.