Temperate bacterial viruses (phages) can transition between lysis - replicating and killing the host, and lysogeny - existing as dormant prophages while keeping the host viable. It was recently shown that upon invading a naive cell, some phages communicate using a peptide signal, termed arbitrium, to control the decision of entering lysogeny. Whether communication can also serve to regulate exit from lysogeny (known as phage induction) remains unclear. Here we show that arbitrium-coding prophages continue to communicate from the lysogenic state by secreting and sensing the arbitrium signal. Signaling represses DNA-damage dependent phage induction, enabling prophages to reduce induction rate when surrounded by other lysogens. We show that the mechanism by which DNA damage and communication are integrated differs between distantly related arbitrium-coding phages. Additionally, signaling by prophages tilts the decision of nearby infecting phages towards lysogeny. Altogether, we find that phages use small molecule communication throughout their entire life-cycle to measure the abundance of lysogens in the population, thus avoiding wasteful attempts at secondary infections when they are unlikely to succeed.