Expected to be operational by the third quarter this year, the smartcard payphones will be available at a targeted 1,700 booths in the first year throughout the state.

"The smartcard payphones can be programmed to adapt to various customised needs benefiting both the end-user and trade," a Tata Teleservices release said. The technology also permits the telecommunications person to perform remote monitoring and tracking thereby reducing fraud to a "very large extent, the release said.

Smart cards come in the size of a standard plastic credit card embedded with a computer chip, analysts say. They can hold various types of information in electronic form and have sophisticated security mechanisms.

Tata Teleservices expects to serve 50,000 subscribers after one yearof operations. It has already started advertising for franchisees to operate its payphone booths across the state, apart from beginning its fibre-optic cable-laying operations. The Tata group has a major presence in the telecommunications sector in Andhra Pradesh through Tata Telecommunications.