MOSCOW, December 28 (RIA Novosti) – Russia will end its program to equip every locality nationwide with a phone booth because the service costs more than providing every caller with a smartphone, the country’s Communications Minister said.
“Every phone booth user costs the budget 35,000 rubles ($1,150). It’s cheaper to get every caller an iPhone,” Nikolai Nikoforov told Forbes Russia in an interview published on Friday.
The average price for a 16 Gb iPhone 5 in Moscow’s online stores was 28,500 rubles ($960) as of Friday, while the iPhone 4s averaged 22,000 rubles ($720).
However cheap they are for people to use, phone booths hit the public purse hard: one minute cost 550 rubles ($18) in 2010, Forbes said. Total spending on the phone booth program since 2007 stood at 80 billion rubles ($2.6 billion).
The program, funded through a tax on telecoms operators, was launched after a 2003 law on communications guaranteed the population access to phone services.
The program spawned 148,000 phone booths across the nation. Ninety percent were installed by state-controlled corporation Rostelecom, a frequent target of Nikiforov’s criticism, Forbes said.
Residents in remote areas such as the far eastern Chukotka Region use the phone booths to call corporate toll-free numbers “just to talk to other people,” Alexander Mushkarin, who supervised the phone booth program at the Federal Communications Agency, told Forbes.
But the government will not prolong the current contracts for phone booth maintenance after they expire in 2014, said Federal Communications Agency head Oleg Dukhovnitsky.
The government is still considering what to spend the telecoms tax on, instead of the phone booths, Dukhovnitsky said. One option is funding construction of fiber-optic communication lines and cell phone towers in remote areas, he said.
(Updated at 17:10, clarified third paragraph, removed reference to ‘exaggeration’)