Understanding how delivery and exchange of genetic information by bacteriophages shapes bacterial populations is important for designing applications for phage therapy, biocontrol, and microbiome engineering. Here, we present a synthetic intercellular communication system that repurposes phage M13 for genetic exchange between Escherichia coli cells and build mathematical models of the communication behaviour. Our models, based on Chemical Reaction Networks, capture the growth burden, cell density, and growth phase dependence of phage secretion and infection kinetics and predict the stochasticity characterising phage-bacterial interactions at low numbers. In co-cultures of phage sender and receiver cells, resource sharing and selection pressure determine the choice of horizontal versus vertical phage transmission. Surprisingly, we discover that a phage-encoded immunity factor confers extracellular protection to uninfected bacteria, reducing infection rates by 70%. In a simulated gut environment, this novel “self-jamming” mechanism enables the phage to farm uninfected bacteria for future infections, increasing the overall success of both M13 and E. coli. The synthetic system developed here lays the groundwork for implementing population level controls in engineered bacterial communities, using phage signals for communication.