Have You Ever Wondered Why Phone Contracts Have Raised From 12 Months In Length, Right Up To Two Years?







Going back to 2004, if you took out a mobile phone agreement, you could only guarantee it would be for a 12 month period of time. You would most probably have been provided with a free mobile phone by your local phone retailer and have been given a pack of inclusive minutes plus a pre determined text allowance. When you got in to the 11th month of the agreement, the network provider would have got into contact with you and offered you another free mobile phone in an attempt to get you to sign up for another 12 month contract.

As 2006 approached, numerous shops and mobile phone network companies started to replace the 12 month agreement with the longer 18 month term contract, which in turn meant that the customer would have to keep their mobile phone for around 6 months longer compared to previous years. There are two big winners from the longer 18 month term phone agreement, and you can be certain that the consumer is not one of them.

Understandably, the biggest winner in the longer term agreement length would be the mobile phone network provider, as in theory, they have now cut down their costs related to providing customers with free mobile phones by around one third. Another silent winner was also the mobile phone insurance companies, as more consumers decided to get mobile phone insurance to protect their mobile phones, since they understood that there was a longer period where it could get lost or thieved, with no option of another free phone before the end of the 18 month agreement.

Within a year of the new longer mobile phone agreements, the network providers altered the rules again by increasing contract time periods by another 6 months to a long 24 month time period. Again the mobile phone network providers decreased their prices as they only supply you with a free phone every two years, their savings must run in to the millions each year. With the networks saving money, the customer is left to take the gamble of protecting their mobile phone with mobile phone insurance, or opting to take the chance of it lasting two complete years and not get lost, stolen or damaged over the 24 month time period.

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