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 Monday, January 31, 2011

Contract lengths for mobile phones have been getting longer with 24 months becoming the norm. 12 month contracts have all but disappeared. This is due to the cost of handsets which the networks are supplying free of charge and subsidising from their contract revenue.

In order to recoup the handset costs, which often run into several hundreds of pounds for the latest SmartPhones, the contracts had to be longer to keep down the monthly cost to a reasonable level.

Now the EU is introducing new telecoms legislation which needs to come into UK law by the end of May. Included within this is a stipulation that contracts should be no longer than 24 months and that consumers should be offered 12 month contracts.

So 12 month mobile contracts should be making a return to the UK in May across all of the networks but don't hold your breath for lots of bargains. Only on the cheapest of phones are there going to be cheap deals and top-end SmartPhones are going to be incredibly expensive.

For ordinary consumers the chance to change phones every 12 months or even to change network could be quite appealing. For business customers 12 month contracts are not so exciting.

Business mobile contracts can usually be upgraded mid-term, which means that after a year of a 2 year contract new phones can be had subject to extending the contract for a further year. There is also the option of an allowance for new phones when signing initially which gives you a pot of money to dip into when phones need replacing.

Also included in the EU laws is a move towards transferring mobile numbers within a single day, rather than the 2 days (or longer) it currently takes. Making it easier to move between networks when your contract has ended.