What's the deal with the long-term contracts with home phones???

darrenforster99

Firstly thankfully I'm with Plus Net who offered me a 1 month rolling contract which is just what I want.

But I can't get over the cheek of some of these other phone companies that are offering 12 or even 18 month contracts for a home phone.

Just what exactly are they playing at???

I know the original idea with these 12 month contracts came up with mobile phones. The idea was they give you a "free phone", and lock you in a 12-month contract so you can't just take the free phone and go to a rival phone company with 1 month of owning the phone, and to ensure the phone company makes profit on the phone (of course mobiles have got bigger and better so now they need 18-24 month contracts just to pay for the phone)

However on a home phone just what exactly are you getting for signing the 18-month contract.

I don't see home phone firms giving away free top of the range home phones with their 18-month contracts, or anything, so I'm just wondering what exactly are you paying for when you get locked into an 12 or 18 month CONtract with these firms?

The only thing I seem to see that some of them give away free is a free £20 ADSL router - big wow - there is a big difference between getting a £400 smart phone on an 18-month contract with a mobile network, and a cheapskate home phone service locking you into a contract for a cheap and tacky £20 ADSL router (most of them don't even give out the good stuff, like Netgear or anything, it's usually the cheap sweat-shop rubbish, like Thomson or D-Link)

So does anyone want to enlighten me here, what exactly do we get free from these home phone firms for us signing the contract, or is it that they're all in it together and they know you have very little choice other than to sign your life away just for the privilege of having a home phone, have I uncovered a little scam here, and isn't it about time the end consumer started telling these home phone companies that if they want our business then they've got to start giving us something for us to sign stupid length contracts, the same way mobile phone companies give us free phones, or PS3's , or Wii's for the contract.

iniltous

Not a good comparison in my opinion, contract for a decent smart phone £30-40/month 24 month deal, so £720 to £960 minimum income for the mobile phone company, landline providers may have 18month deals, but most will also have 12 month deals which may be a bit more ( but a shorter term) and usually are between £7-£14 so minimum income £84 to £168.
It may cost you or I £400 to buy an iphone (or similar), but O2 and the rest of them will get them for a fraction of that price.
There are some telcos that do shorter than 12 month contracts as you already know, so people have a choice, if you dont like a particular companys T&C's, dont use them

darrenforster99

Yeah I know what your saying and that you have a choice to evade ones with insanely long contracts but one thing that annoys me is that in this area if I want my phone line LLU I've got one choice and that is TalkTalk. Now I've heard from a few people in the area that TalkTalk is a lot faster round here than BT Wholesale (apparently it would appear they get 8mbps - which I find hard to believe seeing as our exchange is still only on ADSL1, not ADSL2). However my major problem with it is that if I sign up to TalkTalk and it's no faster (or even worse slower!) than my existing connection then I've got to sit it out for a whole 12 months, and that's 12 months of a poorer service, last time I called TalkTalk up about our area I was told that the line speed is 8mbps (however PlusNet told me the line speed was only 1mbps, but we actually get about 2-3mbps from PlusNet some of the time - just about enough to keep Grooveshark happy!), however I'm not too sure whether or not to believe TalkTalk on their 8mbps claims because we all know TalkTalk are really good at bending the truth when it comes to true data speed, and once you sign a 12 month contract with them it is in the small print that they don't guarantee any speed so basically it leaves you screwed over for 12 months with nowhere to go, and 12 months is an awfully long time to be with a company supplying super-slow broadband, especially if they ever get round to upgrading the exchange to fibre here (apparently Shropshire council just got a big wad of cash to do this, although they'll most probably spend all that in Shrewsbury, and leave Ludlow in the dark ages - I think the Roman's probably had a better communication system in Ludlow than we do now!).

I am very tempted to switch to satellite broadband, again it's another 12 month contract but does seem quite fast, although very limited usage. I've asked them what happens when you go out of the usage and the only reply I get from them is that it goes slower, but they can't quite give a definition of how slow - if it's 2mbps I could certainly live with that as it's the same I'm paying plus net but with a faster connection for the first few Gb. Also we have a VOIP phone here and I've heard two things the satellite broadband company says VOIP works fine with sat broadband, and yet numerous other people say 'cos of the delay sending the signal up to the sat and back down again it doesn't work, again is this a misleading quote from the satellite broadband company just to get you to sign a 12 month contract? It's great these 12 month contracts 'cos they allow so many firms to bend trading standards laws, and get away with it

Buzby

You overlook a few issues. A minimum term prevents the company doing all the work in obtaining and setting up the customer, only to lose them perhaps days later because of their fickleness or that they are easily persuaded by a competitor. I would much rather prefer a commitment route, than us all having to pay increased charges simply to cover those that cannot make their minds up. Similarly, some lock-in's (like BT's free weekday calls) is optional and will reward those agreeing to it with the stated benefit.

If there are onerous set-up fees, then I agree a lock-in is unfair, but then as you have to be told about them, if you agree THEN move, it's only fair you reap what you sow - not !!!!! about it because something unforseen happened. I dislike 'rolling' contracts, but once an agreed commitment is met, then 30 days is ample notice of termination.

TalkTalk

HI Darren,

In terms of contract terms this is because of the associated up front costs of provided broadband and phone services via LLU, which is exactly what you are looking for.

LLU costs the ISP a large amount in advance for connection in the exchange due to the necessary engineering works. This is obviously recouped via the monthly bill paid by the line user.

However a minimum contact term ensures that ISP's are not paying large up front fees to connect customer to LLU who subsequently leave after a short period. The minimum terms are often designed to give sufficient time for initial connection costs to be recovered. As such although there is no equipment received up front as in the case of a mobile phone there is still relevant upfront costs. The contract terms all ISP's sufficient time to cover these costs via bill payments.

The alternative would be to ask customers to pay much larger connection fees to ensure these costs are covered in advance. In most cases large connection fees are a deterrent to new sales therefore in most cases ISP's will offer a lower connection fee (which is often at a loss by comparison to the wholesale cost of installation) then a minimum contract term to allow the cost of installation to be mitigated over time via bill payments.

with respect to the speed of services with TalkTalk these are offered upto 24mb. However at the time of sign up speed tests are completed to give an indication of the actual speed you receive, rather than the upto speed (which only indicates the maximum connection speed the exchange can achieve)

Regards

Mark