MSE News: EU overhaul means shorter mobile phone contracts

OneADay

gjchester wrote: »

I'm glad your happy, my problems is that something will go up in price to pay for this EU meddling. 12 month contracts have been around people don't want them as we in the UK are used to getting the phone free as part of the contract. As phones go up in price and we expect them to be free something has to give, and that was contract length

If you want to change phones often the best way is buy a sim free phone and a monthly or yearly sim contract.

The networks got rid of the 12 month contracts so they could stick people on 18 month ones (then 24, even tried 36) only so that they could keep customers hooked longer and make more money.

It was not the customers who said 'No thanks we don't want 12 months'.

I would rather that the OFT had made this judgement and not the EU - the minimum term should always be 12 months. Networks should be able to charge more for the high end phones (if they want to offer them on 12 months) - otherwise just offer customers the cheaper lower end phones (at least the customer has an option rather than be tied in for a year and half or longer).

Snakeeyes21

foxtrot_mike wrote: »

Quite right

Im delighted for this news, more so to prevent longer contracts being introduced which I feel, if the industry did this would mean that shorter contracts would be stopped just like 12 month contracts.

I was conned into a 24 month contract last time, i thought id try it, but i ended up with a phone I hated and ended up selling it and buying sim free, I have now lost confidence in phones so I want the opportunity to now have a shorter contract, 18 months would probably be ok for me but certainly not 24 months.

Therefore it is good to have the choice of duration of contracts, I think the networks were beginning to abuse their monopoly by all of them fixing the length of the contract to the expense of their customers.

Care to share how you were conned in to a 24 moth contract

foxtrot_mike

Snakeeyes21 wrote: »

Care to share how you were conned in to a 24 moth contract

I exaggerate, more like strong salesmen tactics coupled with lack of assertiveness on my part, lesson learned.

hazelwoods

gjchester wrote: »

I'm glad your happy, my problems is that something will go up in price to pay for this EU meddling. 12 month contracts have been around people don't want them as we in the UK are used to getting the phone free as part of the contract. As phones go up in price and we expect them to be free something has to give, and that was contract length

If you want to change phones often the best way is buy a sim free phone and a monthly or yearly sim contract.

I could immediately respond with "Says who?"

I don't want to buy a phone outright and then go sim only. I WANT to be able to have my phone on a contract, but have the freedom to change after 12 months.

All those people you say don't want a 12 month contract don't have to have one. If they want a free phone they have the choice of a cheaper phone or a longer contract. If I choose a 12 month contract I am the one who has to pay the premium for that. It does not impact on anyone else's contract cost, not even yours.

We all have the right to make our own choices, unless that choice has a detrimental effect on someone else.

gjchester

OneADay wrote: »

The networks got rid of the 12 month contracts so they could stick people on 18 month ones (then 24, even tried 36) only so that they could keep customers hooked longer and make more money.

It was not the customers who said 'No thanks we don't want 12 months'.

Not sure how true that is. 5 years ago a phone cost a few hundred at most, then as phone makers added features people started demanding more fuctions and features on phone and it's not uncommon now for a smart phone to cost £500 or more.

A £200 phone would mean you'd need to pay £17 back a month to cover the subsidy over 12 months, so on a say £25 contract just £8 of the monthy rental was for the actual airtime use.

Now smartphones cost more, if you were to consider it on a 12 month contract the subsidy would have to be paid back at £40 a month, making contract £50 or so a month on 12 months.

You also have to bear in mind that until the Iphone was released no-one considered paying much for a phone, the market pretty much meant you could get any phone free on a contract, I can only remember once I paid for a phone and that was a tenner. Apple turned that around and it's now more acceptable to pay something for a smartphone.

Your right it was not the customers saying "No thanks we don't want 12 months" It was the customers saying we want better phones with more features BUT we don't want to pay more in terms of phone costs or line rental. If the phone cost and line rental are not to increase the only other option is the contract length.

At the end of the day phone companies are a business, if it's not commercially viable they would not do it, and expensive smart phones free on 12 month contracts at monthly prices we want to pay (which means usually up to £40 for most people) would not be comercially viable.

What remains to be seen is how much more the charges will be for a phone once this pans out.

Vodafone Charge £30 a month and £199 for a iPhone 300 mins contract over 24 months. Same contract over 18 months is £35 a month. 12 months is £35 a month but £299 for the phone.

Over the term of the contract
24 months is £919 - gives a "true" monthly cost of £38 a month
18 months is £829 - monthly cost - £46
12 months is £689 - monthly cost - £57

Sim Free iphone (520) and GiffGaff goody bag (£10) to give the simialr tarrif

24 months is £760 - monthly cost - £31 a month
18 months is £700 - monthly cost - £39
12 months is £640 - monthly cost - £53

So whilst the 12 month contract seems cheaper at first when you add in the device cost and average it over the contract term your paying a lot more for the 12 month contract per month.

OneADay wrote: »

I would rather that the OFT had made this judgement and not the EU - the minimum term should always be 12 months. Networks should be able to charge more for the high end phones (if they want to offer them on 12 months) - otherwise just offer customers the cheaper lower end phones (at least the customer has an option rather than be tied in for a year and half or longer).

At the end of the day the ban should not have happened, I don;t see how it's in the interest of the consumer.

Vodafone have always offered a 12 month option on contracts, but never heavily advertised it, and if you did ask you would not have liked the prices.

It should have been left to the individual to decide what they want, the 3 year orange contract was perfect for some user, but not for all users. There has always been SIM only options that run for 1 or 12 months as well but many people eschewed them as they had to pay for a sim free phone.

Just looking at the example above I'm not sure how thats considered to be in the best interest of the consumer, Comparing it to GiffGaff shows it's still cheaper to get the phone sim free and a SIM ONLY contract, BUT people don't want to pay the £520 for the iPhone up front, which is skewing the market.



After saving this I notice this.

https://forums.moneysavingexpert.com/discussion/3260108

The OP is given advice that they may need to buy a sium Free iPhone to retain there tarriff and the OP's reply is


"I'm not getting it sim free, Jesus that expensive "

Thats the problem, we are all used to gettting subsidised phones any change seems odd, even though it may be a better deal to us as a customer.

foxtrot_mike

gjchester wrote: »

Vodafone Charge £30 a month and £199 for a iPhone 300 mins contract over 24 months. Same contract over 18 months is £35 a month. 12 months is £35 a month but £299 for the phone.

Over the term of the contract
24 months is £919 - gives a "true" monthly cost of £38 a month
18 months is £829 - monthly cost - £46
12 months is £689 - monthly cost - £57

Sim Free iphone (520) and GiffGaff goody bag (£10) to give the simialr tarrif

24 months is £760 - monthly cost - £31 a month
18 months is £700 - monthly cost - £39
12 months is £640 - monthly cost - £53

So whilst the 12 month contract seems cheaper at first when you add in the device cost and average it over the contract term your paying a lot more for the 12 month contract per month.

Or compared to my workings out here.
https://forums.moneysavingexpert.com/discussion/3258204

numptymax

I have been with Three for over 5 years and have two accounts with them. But I am not so fed up with their customer services I want to leave. My contract is due to expire (END) on 31.03.12 but they say I still have to give 30 days notice. surely this cannot be right? Does anyone know? txs

grumbler

This is right. It's your minimum term that expires, not the contract.
> Pay Monthly Terms and Conditions
Para 10.


That said, " MSE News: EU overhaul means shorter mobile phone contracts" thread is a very odd place for asking such question.