A friend just tried to register but his phone number was reported to be taken.

I can see several problems with phone numbers as registration requirement.

1. Phone numbers are not a live long property. You can loose a phone number by getting a new contract with a different company.
2. People might make a typo when trying to register. Unlike e-mail a typo will most likely still be a valid phone number. If the true owner of that number wants to register he or she will be denied service.
3. Speaking of denied service: a malicious person could start and abandon a registration with someone else phone number in a deny of service attack. This is also valid for E-Mails.

Adding a requirement for phone numbers, and in lesser degree EMail, without a recovery process seems to be a mayor design flaw top me.