Have You Ever Thought About Why Phone Agreements Have Increased From 12 Months In Length, Right Up To 24 Months?

By Erina Array

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Going back to 2004, if you took out a phone agreement, you could just about guarantee it would be for a 12 month period of time. You would most likely have been provided with a free mobile phone by your local phone retailer and have been given a bundle of inclusive minutes plus a pre determined text message allowance. When you got in to the 11th month of the agreement, the mobile phone network provider would have contacted 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, many stores and network companies began to replace the 12 month agreement with the longer 18 month term contract, which in turn meant that the consumer would have to keep their mobile phone for about 6 months longer compared to previous years. There are two big winners from the longer 18 month period phone agreement, and you can be certain that the consumer is not one of them.

As you can imagine, the biggest winner in the longer term agreement length would be the phone network provider, as in theory, they have now cut down their prices 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 take out mobile phone insurance to protect their mobile phones, as they understood that there was a longer time period where it could get lost or thieved, with no option of another free phone until the end of the 18 month agreement.

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

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