18 month contracts?

kam1nsk1 wrote:

Just wanted the general consensus on 18 month contracts.

It seems that is where the phone companies are herding people but how do people find them in practis? Used to work for vodafone and lot of people coming unstuck, losing expensive phones and unable to upgrade for, like , a year or something? Is there any way round this as I am consideribng an 18 month contract with 02

There'll always be the 12month deals somewhere, but the networks indeed are offering their best deals to people who sign up for 18months.. All about customer retention, as people jump ship to other networks a lot more frequently. Eventually the playin field will level out and they'll all be offering similar deals, but with longer contracts. I think the upgrade situation will change also, back to something similar when O2 did O2 Gold, where you paid a little extra per month, but were entitled to an upgrade every 6months, however you entered another 12month contract. The same thing might happen here, 18month contracts, with the option to upgrade after 12 months provided you sign a new 18month contract. Meaning that if you dont want an upgrade, you can't leave until the 18months has elapsed.

Keep an eye out, France Telecom...oops, I mean Orange, are planning on rolling out 2 year contracts soon

If you go for a flext 35 with the 25% discount you are already up nearly £9 per month.

Sell your old phone on ebay £50ish if its a good one. If you get bored with your new phone sell it after 12 months on ebay £50-100. Theres the funds to buy a new phone after 12 months, and take out insurance in case you lose or break it.

Personally I do not recommend 18 month contracts, particularly 18 month versions of 12 month agreements.

With a 12 month contract you have the option of getting a new handset every 12 months, either by starting a new contract or going the upgrade route. With an 18 month contract this period is generally extended to 18 months. So over a 3 year period you will have received 3 new handsets with 12 month contracts but only 2 new handsets with 18 month contracts.

The value of these handsets must be considered. A brand new handset taken with a contract could be sold for £250+ if you were happy using your existing handset. Alternatively it could be sold at the end of the contract for approximately £50. You have one less handset to do this with over the 3 year period if opting for 18 month contracts. And as mentioned by kam1nsk1 and westie666, the extended period can present problems if you handset is lost or stolen or if you need cancel and buy out your contract.

Of course most 18 month contracts come with tempting extras that are not included as part of their 12 month equivalents. These must be traded off against the potential value of the handsets as described above. This is also the case with 18 month only contracts (like T-Mobile's Flext plans) which provide a generous allowance but with the predicament of being tied in for the longer period.


The two cashback examples below illustrate that you save just over £1 per month if taking an 18 month version of a 12 month Vodafone tariff whereas the monthly cost for the Orange tariff is identical for both 12 and 18 month contracts! The extras that come with the 18 month contract are detailed.

Both examples are cashback deals for a Samsung D600 purchased via e2save.

Vodafone Anytime 350 (12 months)
£40 pcm
10 months half price line rental
Term cost: £280
Month cost: £23.33

Vodafone Anytime 350 (18 months)
£40 pcm
8 months free line rental
Term cost: £400
Month cost: £22.22

Extras with 18 month contract:
Stop the Clock


Orange Canary 40 (12 months)
£40 pcm
8 months half price line rental
Year cost £320
Month cost £26.67

Orange Canary 40 (18 months)
£40 pcm
6 months free line rental
Year cost £480
Month cost £26.67

Extras with 18 month contract:
Magic Number & 3 Months Free Orange Photography



In my opinion the extras provided by the 18 month contracts in these examples do not represent a good enough reason to opt for the longer agreements. When combined with the other negatives previously described the 18 month contract should definitely not be considered if you are looking for the best value.

All 18 month contracts seem to have done is confuse the consumer even more while at the same time offering little benefit. I am still at a loss to why the networks continue to push these but I am guessing it is all about retention and reducing churn.

I apologise for the excessively long post - I hope someone finds it useful!

Cheers
Mark
Mobile Mole

12 month contracts not only allow you to upgrade your handset more regularly, it give you the option to negociate aggressively when your contract is due for renewal.

I've just signed up for Flex 35 with T-Mobile, after having an orange contract. Got them both on the web, was paying Orange £15 a month (instead of 25), didn't realise that the 18 months were up till I got a bill for £27. Was getting 120 minutes and 30 texts for that. By signing up on the web with T-Mobile, the Flex 35 is only £26.25 a month for life. For that I get £180 credited per month to use how I like. As I phone more than text this is equivalent to 900 minutes! A far better deal, tha Orange couldn't match at all.
I've kept my old phone, which works fine, so if I lose this one, I've still got a phone.