MSE News: Mobile operators forced to offer 12-month contracts 27 January 2011 at 5:42PM in Mobiles 68 replies 8.5K views

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Users will no longer be compelled to tie themselves into lengthy deals by the rules that'll come into force by late May ..."

Read the full story:
Mobile operators forced to offer 12-month contracts

me4bargains

I might be cynical here but I think the networks will make it so expensive to have a 12-month contract that it won't be financially viable to most people so they'll end up being 'forced' into 18 and 24-month contracts!

Stuart_W

Seems rather pointless. Won't this just make 12 month tariffs poorer value? As it currently stands, a 12-month SIM only contract and a SIM free handset can beat several 18-month and 24-month deals as it is.

Also interesting that my current phone contract - a 36 month one - will be outlawed. Wonder what that will mean for me? I'll be one of the very few people to ever have had a 36-month phone contract. Launched by Orange in June 2009, banned by the EU in May 2011! Seems like an odd rule. I was made aware of it. Have not been duped. I can be sold plenty of other devious rubbish perfectly legally, but not a 36 month contract. Who benefits from such rules. :question:

I have a discount on my home telephone and broadband from the Phone Co-op for choosing to opt in to a 36 month contract. Hope the EU don't make that consumer choice illegal, too.

M4RKM

I replace my handset yearly, I'm on a rolling 1 month, and buy my handset outright. However, if they are fair, and it works out the same TCO as such, then I'll tie myself in for 12 months.

I've done 1 18 month contract, and ended cancelling it early. 12 months contracts are great, and this is good news that they're going to do this

davetrousers

me4bargains wrote: »

I might be cynical here but I think the networks will make it so expensive to have a 12-month contract that it won't be financially viable to most people so they'll end up being 'forced' into 18 and 24-month contracts!

I think you've hit the nail on the head there.

Mind you as phones get smarter, then inevitably they're going to cost more, which is why 18 and 24 month contracts came about.

jgriggle

When I shop for a new mobile contract the only figure I look at is the total amount that the whole contract will cost. At the moment I pay £25 a month over 18 months for quite a flash phone (was quite pleased with that as the advertised price was £35 a month - even got them to throw in their SatNav package for free as well which is normally £5 a month).

You'd probably find that overall a 12 month contract would cost the same, if not more, than an 18 month contract for the same phone with the same call package.

cgk1

Seems like an odd rule. I was made aware of it. Have not been duped. I can be sold plenty of other devious rubbish perfectly legally, but not a 36 month contract. Who benefits from such rules.

The marketplace and ultimately the consumer, the limitation on contract term means that churn is higher and the networks have to fight harder for customers.

cgk1

davetrousers wrote: »

I think you've hit the nail on the head there.

Mind you as phones get smarter, then inevitably they're going to cost more, which is why 18 and 24 month contracts came about.

Actually it's the other way, while the high-end handsets are going to continue to command premium prices, the actual average cost of a handset will decrease in the same way that prices declined in the PC marketplace. The cost of building an Android handset is getting as low as £18 per unit which is how Orange are able to sell an ok Handset in the Orange San Francisco for less than £100.

A lot of bottom-feeders are going to get into the smart-phone marketplace in the next couple of years so we will see further downward pressure on prices. This is fantastic for people like me who want to pair a smart-phone with a sim-only contract. High volumes, low margins is where the action is going to be at.

rev_henry

This may have just converted a staunch euroskeptic...

A_Flock_Of_Sheep

About time. All contracts longer than 12 months should be outlawed.

The operators and handset manufacturers would have to do something with pricing as people just wouldn't buy.

ruggedtoast

I'm about a 1/4 way through a 24 month contract. Doubt I will want to be tied in for such a long time again although to be fair as I didnt want to pay the increased cost of an 18 month one, I very much doubt I would look at 12 months.