Warning over ‘ultra-long’ phone contracts that could lock you in to higher prices – how to avoid paying up to £350 more
MOBILE users are being warned about the rising trend of “ultra-long” phone contracts, with some lasting up to FOUR years.
Experts say they could trap users into paying higher prices and unexpected costs.
Data from Uswitch for The Sun, shows that some customers risk being up to £348 worse off by taking out a 36 month mobile contract.
With pay monthly mobile phone contracts, customers agree to pay a fixed amount each month for a specified period.
These contracts usually include two main components – the cost of the mobile handset and the cost of the mobile service, which covers calls, texts, and data usage.
The length of these contracts has typically ranged from 12 to 24 months.
However, Ernest Doku, telecoms expert at Uswitch.com, said: “Whilst there is Ofcom regulation that bans mobile contracts over 24 months,
“36 month deals have become much more prevalent.”
Most now offer quotes for a 36 month contract, but in January, Virgin Media O2, introduced a 48 month tariff for a specific Samsung smartphone.
We compared prices for taking out an iPhone 15 contract with the four biggest mobile networks over a period of both 24 months and 36 months.
We chose the most popular advertised airtime tariff and crunched the numbers to show that customers opting for a 36-month contract risk paying significantly more overall.
This results, despite the fact that the monthly handset costs are significantly lower throughout the period.
For example, those talking out a 36 month iPhone 15 deal with O2 can expect to pay at least £1,713.60 across the whole length of the contract.
The same customers taking out an equivalent 24 month contract would pay £1,407.60 overall – £306 less than the longer contract.
The same 36 month contract at Three would cost £348 more than the equivalent 24 month contract, and £312 more at Vodafone.
Meanwhile, EE‘s 36 month contract costs £299.88 more than its 24 month equivalent.
It’s important to note that these prices are just a snapshot and your quote will depend on the exact type of phone and airtime package you sign up to.
These figures also don’t include mid-contract price rises which usually see costs hiked by inflation each April.
The mobile networks have been contacted for comment.
SPLIT CONTRACTS
Ofcom’s own rules stipulate that telecom firms cannot provide a bundled mobile phone and airtime package (data, texts and calls allowance) that lasts more than 24 months.
But firms are avoiding falling foul of the rules by offering longer deals with at are called split contracts.
Ernest said: “This is when providers separate the airtime – minutes, data and texts – from what is essentially a handset loan.
“While this has some clear benefits, such as stopping customers from continuing to pay over the odds for a handset after the end of a contract, with the increasing costs of flagship devices, these split phone plans are beginning to become ever more lengthy to keep monthly costs manageable.”
A spokesperson for the regulator told The Sun: “We regulate airtime contracts, and our rules are clear – mobile providers cannot offer airtime contracts that are longer than 24 months, and cannot bundle a handset contract with airtime if it is longer than 24 months.”
Split contracts mean once you hit the 24 month mark of a 36 month contract, your airtime package will need to be renewed for another 12 months.
Firms are required to notify you about this ahead of time. They should give you the option to pick your own airtime upgrade.
By doing this yourself you’ll usually save more than if you were to allow the contract to roll-over.
Failing to act risks your provider placing you on a more expensive 12 month airtime plan.
Ernest added: “Providers do also have the opportunity to get in touch with you long before the end of your current deal to offer a new phone, so do have a quick check and see what’s available in the wider market, as a lot can change in terms of costs over the life of a contract.
“With the rising cost of devices, contracts longer than 24 months do give consumers who want the latest and greatest handset models the opportunity to spread the cost over a longer period of time.
“Whether you should choose a contract longer than 24 months depends on your needs. If you like having the latest tech and would prefer not to pay outright for a handset, it can be a good option.”
However, if you do have the cash to pay for a new mobile upfront, buying a sim-only contract will always be the cheapest option.
SIM-ONLY TARIFFS
We also crunched the numbers to see how much less you’d pay if you bought an iPhone 15 directly from Apple for £799 and paired it with a like-for-like airtime contract covered in the tables above.
Over the course of 24 months customers could expect to pay between £1,255 and £1,326.76 over the entire period.
For example, O2 customers doing this would spend £386.84 less compared to taking out a bundled 36 month pay monthly deal with the equivalent airtime tariff.
The same customer would save £80.84 compared to taking out a bundled 24 month pay monthly deal with the equivalent airtime tariff.
CUT YOUR TELECOM COSTS NOW
SWITCHING contracts is one of the single best ways to save money on your mobile phone bills.
But if you can’t switch mid-contract without facing a penalty, you’d be best to hold off until it’s up for renewal.
But don’t just switch contracts because the price is cheaper than what you’re currently paying.
Take a look at your minutes and texts, as well as your data usage, to find out which deal is best for you.
For example, if you’re a heavy internet user, it’s worth finding a deal that accommodates this so you don’t have to spend extra on bundles or add-ons each month.
In the weeks before your contract is up, use comparison sites to familiarise yourself with what deals are available.
It’s a known fact that new customers always get the best deals.
Sites like MoneySuperMarket and Uswitch all help you customise your search based on price, allowances and provider.
This should make it easier to decide whether to renew your contract or move to another provider.
However, if you don’t want to switch and are happy with the service you’re getting under your current provider – haggle for a better deal.
You can still make significant savings by renewing your contract rather than rolling on to the tariff you’re given after your deal.
If you need to speak to a company on the phone, be sure to catch them at the right time.
Make some time to negotiate with your provider in the morning.
This way, you have a better chance of being the first customer through on the phone, and the rep won’t have worked tirelessly through previous calls which may have affected their stress levels.
It pays to be polite when getting through to someone on the phone, as representatives are less inclined to help rude or aggressive customers.
Knowing what other offers are on the market can help you to make a case for yourself to your provider.
If your provider won’t haggle, you can always threaten to leave.
Companies don’t want to lose customers and may come up with a last-minute offer to keep you.
It’s also worth investigating social tariffs. These deals have been created for people who are receiving certain benefits.