10 May 2011

Lengthy Mobile Phone Contracts to be Banned

Mobile phone contracts of 36 months have been banned under new EU legislation, forcing providers to offer 12 month deals instead.

Mobile phone contracts of 36 months have been banned under new EU legislation, forcing providers to offer 12 month deals instead.

The emergence of more 12 month contracts it is hoped will bring more freedom and choice to those who do not want to commit for a lengthy deal.

According to uSwitch, the number of 12 month contracts on the market has risen from 279 in February to 4,765 at the start of May.

This is probably due to the 3,300 deals cut from the market, following the ban of 36 month contracts. While consumers are saved from committing to lengthy contracts, the cheapest available pay monthly deal has almost doubled as a result, from £5 to £9.

"This new ruling has not only culled the growth of lengthy contracts, but has also opened the door to a new wave of 12 month deals – great news for those savvy customers who want the freedom to move around each year,” said Ernest Doku, uSwitch technology expert.

"People need to consider what they want from their phone, how they will use it and ultimately what they can afford.”

The new legislation came into effect from 1st May in a bid to prevent consumers from getting locked into lengthy contracts.

The research by uSwitch also reveals the number of free phones on the market is also under threat as a result of the new move. Smartphones in particular were the biggest reasons behind the growth in longer term contracts.

The Apple iPhone 4 and Samsung Galaxy S II are not available at all for free on a 12 month contract – the penalty could see a consumer paying £299, or £309.99 for the cost of the handset up front.

The latest tracker from uSwitch showed the iPhone 4 is the nation's favourite handset too.

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