What is a smartphone subscription
A smartphone subscription, or rental, is a service that lets a person use a device for a regular monthly fee. The agreement lasts 12 months, after which the user can switch to a newer model or continue using the service by paying the remaining value over time.
Providers argue that this setup can be more affordable than traditional installment plans. For example, instead of paying 99,000 rubles upfront for Term Leasing, a Xiaomi 12 with 128 GB might be offered at 8,066 rubles per month. Over 12 months, the total comes to around 96,792 rubles, suggesting a small saving compared with a full upfront purchase.
The pricing logic typically looks like this: the device costs 99,000 rubles, plus roughly 11,500 rubles for rental, and about 16,000 rubles in the first year for screen and backplane upkeep. In total, roughly 126,500 rubles are anticipated, with a residual value of about 29,700 rubles that does not need to be paid when upgrading to a newer model. When divided over 12 months, the ongoing monthly cost ends up near 8,000 rubles.
If the user chooses to buy the smartphone at the end of the contract, the company still expects payment of the residual value, approximately 29,700 rubles. Consequently, the 128 GB Xiaomi 12 would effectively cost around 126,500 rubles in this scenario as well. And there are more considerations to weigh.
Terminating the lease early can trigger a charge of the residual value, even if the device is returned. In practice, the remaining balance remains the responsibility of the customer regardless of whether a month or the full year has elapsed.
Automatic renewal at the end of the year is typical, so avoiding the residual payment generally means continuing with the smartphone subscription rather than purchasing the device outright.
What is the difference between subscription and installment
A subscription operates on a rental basis. The user can return the old model after about a year and receive a new smartphone. After 12 months, the replacement is usually free, while early exchanges may incur extra charges.
In a case involving MTS and Forward Leasing, the monthly fee for the Upgrade subscription was presented as roughly 40 percent lower than the annual installment price. In practice, the savings are not always as clear-cut. A Xiaomi 12 can be found in partner stores at notably lower prices, such as 70,000 rubles in some retailers, compared with 126,500 rubles via Forward Leasing for a subsequent purchase.
Under the subscription model, a monthly payment of about 8,000 rubles during the year might contrast with roughly 6,670 rubles in installments. After a year, a buyer can often resell the device to recoup part of the expenditure.
Do you need a subscription
Industry observers note that renting smartphones today often does not offer a clear advantage over installments. A leading analyst from Mobile Research Group explained that, in many cases, the device remains with the user under installments and can be sold at any time, which can be more flexible and financially sensible for buyers. If scarce items are involved, rental may have a role to play, but for widely available devices, leasing demand has cooled.
The takeaway is that subscription offers tend to decline when there are plentiful alternatives or when the perceived advantage diminishes compared with traditional ownership through installments.
Subscription Disadvantages
While convenience is appealing, the practical benefits of a subscription are often overstated. The process still requires standard documentation typical of a loan agreement, including proof of identity and financial history.
Hidden charges can appear in the form of late payment penalties or fees tied to the device condition upon return. For example, late payments might incur a fee of around 1,500 rubles. If the gadget is returned in pristine condition, an upgrade after 12 months can be free; however, scratches or other damage could cost roughly 10 percent of the device price.