EU fiddling with mobile contracts brings good and bad news

nophoneIt must be nice to be a Eurocrat, making changes to people's everyday lives and then watching what happens. Last year's EU agreement to reform mobile contracts has just come into force in the UK, bringing both benefits and costs for consumers.

The reforms centred on the length of mobile phone contract- the new rules effective from 1 May 2011 mean that contracts cannot exceed 24 months and that providers have to offer 12 month contract products, as well as demanding  mobile operators keep their customers informed of available tariffs, their usage patterns, and be notified if their monthly bill exceeds a set threshold.

Back in 2005, 12 month contracts represented nearly 90 percent of new mobile connections, but by the middle of 2010, that figure had shrunk to a measly seven percent, as recession-hit networks attempted to entice customers into longer deals to keep them loyal.

Now, research by comparison site U-Switch shows that the number of 12 month deals available  has rocketed from just 279 in February this year to 4,765 last week. As you might expect, however, the outlawing of 36 month contracts has meant that 3,300 products have necessarily been removed from the market.

While the abundance of shorter contract products is likely to be attractive to those looking to upgrade their phone on a more frequent basis, the sting in the tail is likely to hit the smartphone market hardest- where providers previously offered phones for free with a longer contract, customers may now find themselves having to shell out cash to buy the phone upfront.

And that is the other bit of bad news, before the new rules came in, the cheapest monthly mobile deal could be snapped up for a measly £5 per month with Orange on 30 April. Now, the cheapest deal is with Three, and while still less than a tenner at £9 a month (for a 24 month contract), that represents a whopping 80% price increase in the space of a few days.

So what do you think? Are the EU meddling where no meddling is required and should customers have the right to choose longer (and cheaper) contracts if it suits them? Or is this a valuable consumer protection measure?


  • Paddy
    3 year contracts are ridiculous-if people want to have a phone for that long, let them buy a PAYG phone. I, for one, like to have shiny gadgets and I can't wait to get rid of my HTC Desire after 15 months of a 18 month contract. I don't mind paying more for phone if it means I can offload it after 12 months or so.
  • animaus
    36 month contracts seemed like a crazy idea anyway given that even the most expensive phones free on 24 month contracts. Plus, with the rapid pace of mobile tech at the moment and the constant press to use a phone with the latest OS version, whilst manufacturers hold back updates for older phones, 36 month deals don't seem to be a great deal for anyone else but the networks.
  • Daniel
    it works for me...
  • May
    There's no such thing as a free mobile phone, contact prices with new mobiles are higher than SIM-only contracts, its a loan.
  • The B.
    Paddy, how did you manage to get a Desire 2 months before it's release date? I'm pretty sure it was released on the 14th April last year, leastways that's when I got mine from Vodafone who were the first UK company to get them.
  • Chris
    Real Bob: T-Mobile had the Desire before Vodafone. I received mine on April 1st which was 5 days after the first batch were in customers' hands, I believe.
  • The B.
    @Chris, fair does but Paddy got his in February.
  • Paddy
    My mistake-I meant to say that I can't wait to get rid of it 15 months into a 18 month contract. I've got it on O2 and I'm allowed (very generous of O2...) to upgrade 3 months early which will be in November of this year. I'm going back to Iphone until Android sort their shite out.
  • Admiral
    "I’m going back to Iphone until Android sort their shite out." Hahahah. Yeah, right. If you think Android is bad then you are going from the frying pan into the fire. Do you know how to use a smart phone? Well you'd better learn how to hold it right too now!
  • Paddy
    @admiral, In terms of signal strength and battery life, my HTC Desire is worse (as much as I thought that would be impossible) than the Iphone-the antennae issues were the main reason I jumped ship from Apple. I get one bar at most in my house with my Desire-the missus has an Iphone and has 3/4 bars most of the time in the same location and doesn't suffer from an inability to make bloody calls! The Android store leaves a lot to be desired as well in terms of sorting out the wheat from the chaff. Google can go fcuk themselves if they think I'm using my debit or credit card to buy stuff from the android store. Who knows? Maybe Ice-cream sandwich will sort out a lot of the issues that I've encountered but until that arrives on a phone that I have and I'm not at the mercy of the providers who stall the delivery of updates OTA, then I'm going to go back to Apple and their flaws that I can live with. By the time I have started and finished an 18 month contract, then maybe Ice-cream sandwich will have been rolled out across all Android platforms. I doubt it though....

What do you think?

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