"Every phone booth user costs the budget 35,000 rubles ($1,150). It's cheaper to get every caller an iPhone," Communications Minister Nikolai Nikoforov told Forbes Russia in an interview.
The average price for a 16-gigabyte iPhone 5 in Moscow's online stores has been around $960, RIA Novosti reported Friday.
Total spending on the phone booth program, which has seen 148,000 phone booths installed across the nation since 2007, is a reported $2.6 billion.
Funded by a tax on telecom operators, the program was the result of a 2003 law guaranteeing the Russian population access to phone services.
However, the government will not extend current contracts for phone booth maintenance when they expire in 2014, Federal Communications Agency head Oleg Dukhovnitsky said.