Monday
Oct152012
What's your view on minimum contracts now?
Monday, October 15, 2012 at 3:00AM What's your view on minimum contracts now? (in lieu of 24m becoming pretty much the norm). Thanks to Peter C.
Monday, October 15, 2012 at 3:00AM
Reader Comments (21)
When checking out the deals for the Note II we found it was a little cheaper (around £5pcm) to buy the phone outright and go for a 12m SIM-only contract compared to getting the phone free or cheap on a 24 month contract.
The reduced tie-in was quite an advantage.
I've bought all of my smartphones outright; I was used to it from the PDA days and just carried on.
I don't like any form of tie-in. With Virgin Media and Sky there's a minimum 12 month contract, and cetainly VM tries to start the 12 months again if you change something. So if I try the service and don't like it I'm stuck with it for a year?
Anything that reduces customer mobility is bad for competition.
I guess given how much many smartphones cost it's understandable that they've had to go to 24 months to make the monthly payments affordable. However there should be a much fairer way of getting out of the contract, e.g. you pay off just what's remaining on the phone or the carrier you move to takes it over.
24m is too long. 12m should be more common. In this economic downturn nobody can say if their job is safe and therefore how can you commit to such a long contract.
I use a sim only deal, 12m in duration. £10.36pm and total flexibility.
I'm tied into a 24 month contract. I'd have loved a 12 month contract but they just don't seem to offer them any more.
The fixed contract should work both ways. I was shocked to hear of mobile operators upping their prices mid-contract. That's not how it should work. The operator is guaranteed income for a fixed period and the customer should know what they are going to be charged for that same period.
If the operators aren't happy with fixing the price for that long they should stick to shorter contracts.
I was messing about on the UK T-mobile site looking at various tariff combinations foe the Note 2 and noticed that they offered 6, 12, 18 and 24 month contracts. Very flexible.
I am stuck on two 24 month contracts but I do buy Sim Free when there something I really like/want.
I buy my phones outright mostly from Hong Kong.. For plans I do prepaid as in Australia you get far better value that way than on the 24 or 36 month contracts..
Doesn't tha basically make it an "any length you like" contract, where the operator has no certainty as to the revenue they'll receive?
"Doesn't tha basically make it an "any length you like" contract, where the operator has no certainty as to the revenue they'll receive?"
It would make it difficult to forecast, agreed.
Personally I'm not bothered about minimum contracts per say, just the lack of short term options being offered. In particular, many new premium phones aren't available for less than 24 months, ie. no option to pay a big fat upfront fee (to offset phone cost etc).
Current climate, I won't commit to that long, so in my case they're loosing from me.
Aren't most phones available SIM free from non-network providers?
Yup - thats why I do that now. Not sure many people can afford to put down 4/5 hundred which is why £25 over 24 months seems more attractive.
I guess if it works... I just get annoyed that when I phoned up to renew my sim free contract for another year, I had to fight for 12 months, they were after 18...
Actually the 32GB S3 was only available from Vodafone (as far as I know it still is), so I had to ship one in from Germany at well over the odds.
Also the LTE S3 and Note II are only available from EE AFAIK.
"Doesn't tha basically make it an "any length you like" contract, where the operator has no certainty as to the revenue they'll receive?". Yep. It means they'd have to retain customers through good service and remaining competitive. Good innit? ;o)
I'm with Gavin. 12 months should be the norm.
Ah — so that won't happen, then :)
I can understand challenges on the ability to increase prices unless it's very clear that's the case, but I can't see a regulator deciding that it's no longer possible to have minimum term contracts.
My last 3 phones have been bought unlocked. Agree that paying monthly feels better, but wouldn't want to be locked into for 2 years, and anything less seems to be overly pricy
@Neil yes I was saying how I think it should be, but without any real hope of that happening.
I suppose one of the carriers might introduce something like it as a new type of deal; after all there was no such thing as pay-as-you-go until a few years ago (ok, quite a few, so we're due a new deal).
I'm still using an old £10 T-Mobile contract and buying devices sim free. Its a crazy way of doing things but who ever claimed that any of us here were sane?
Net cost after resale my iPhone 4S cost me a little over £200 for 11 months ownership, Galaxy Nexus £170 for about 8 months and the Galaxy Note about £250 for 7 months.
Even the worst of those works out considerably cheaper than getting the phone free on even the cheapest contract.
I came across phone4u who have a novel contract that is split into 2. One part is your calls, Internet etc and the other your handset. This means you can change handset every six months. Obviously the more you change handsets the more they tie you in.
@Bug - isn't that what Vodafone does with its monthly SIM only plans, then?
@Neil, no because you still have to buy the phone outright.
I'm thinking more the way we mortgage our houses. We don't have to stick with the same mortgage company for the full term; we can move the debt around to get a better deal. Phones are a far smaller outlay but still the same principle could apply.
I think one of the problems is that a lot of people think they're getting a free phone whereas they're really buying it on HP. They probably kinda sorta know they're still paying for the phone but it makes it easy for them to ignore that. Bringing out a new type of deal would probably mean educating those people, and the carriers prefer to keep them ignorant.
Hmm... okay. I think I get what you are looking for now!
I'd have thought there's a lot of formality around the financial services side of mortgages, possibly "shifting debt" in this way...
Well you have to sign stuff, but shifting your mortgage is fairly simple these days (not that I've actually done it).
Basically the carriers could deal with the details (and they should be able to put general agreements in place rather than negotiating each one individulally) and the customer wouldn't really have to get involved beyond seeing what their new monthly bill would be. Simples.
Unfortunately I can't see how one carrier could introduce this to give themselves a competitive advantage. It would need all carriers, and then the whole reason for introducing it has gone (other than being nice to customers...can't believe I just said that...)
Here's a novel idea. Don't buy a phone if you can't afford to buy it outright.
Whoa, how does that work, I'll never be able to get my hands on a shiny iphone6?!
Start with a cheap phone and stay with PAYG or SIM-only and keep costs down. Anything you spend under £30 a month you put into a savings account. You should be able to save £25 a month. Maybe you can put aside £35 a month, which is how much an iphone contract could cost you! After a year you'll have £400 saved perhaps.
When you have enough saved, buy the phone you want, stick to cheapest way of getting service - PAYG or SIM only. Again, anything you spend under £35/month you save towards the next upgrade. You can sell your phone any time you want to help pay the upgrade, which will probably get you a better resale price. You can eventually upgrade when you are ready, not when the biannual cycle hits, and can get the latest phone when the early adopter's premium has fallen.
If you keep your phone beyond the contract period you're not paying for it twice over. And you have the satisfaction of being free to change provider any time you want.
I believe O2 will let you buy your way out of the contract. Before you do, you cancel all the bolt-ons to reduce the monthly fees to a minimum of course!