The fight for a 12 month contract

A consumer watchdog has called for more customer choice, after news that T-Mobile will stop offering 12 month contracts from February.

Government watchdog, Consumer Focus telecommunications expert, Nick Hutton said: ‘We need to see mobile-phone companies offering a range of contract-lengths, which suit consumers’ needs, rather than the existing trend towards longer contracts. Longer contracts may limit consumer choice and could potentially lead to higher prices for consumers.

He added: ‘Longer contracts suit some customers and allow providers to offer discounts on handsets. However customers who find they need to leave their contract may face high termination charges. If consumers are tied into such contracts and rarely switch it may also give less incentive for suppliers to offer the best price deal.’

There are now a limited number of 12 month contracts available, with one of the remaining being through offered through MVNO Tesco Mobile, for the iPhone.Others are available through Orange and Vodafone.

One industry source said: ‘Operators are concerned about churn and one of the ways to diminish opportunities for customers to move is if they are tied in. There is a definite trend towards longer contracts.’