Opinions on 18 month contracts

[tzang]

Apart from network providers wanting to earn a bit more cash due to the longer contract duration as they don't earn as much as before, I'm starting to see an increasing trend in promoting 18 month contracts with e.g. half price deals or deals that seem too good to be true when it simply isn't.

Do people really see a bargain behind all this? I've had friends and relatives who come to me saying they've got a great bargain on this phone with that contract. I'm starting to see a similar pattern not just in this forum but whenever I'm down at CPW / P4U, people are easily tempted but these so-called bargains.

E.g. £40 a month
-500 minutes
-100 text
-30 minutes video calling

On a 18 month contract, you get half price line rental for six months.
On a 12 month contract, you get no deal.
The phone is free, you probably get insurance thrown in for free (and get shafted a few months later when you forget to cancel it and get charged £30 every quarterly).

On the 18 month contract, the network provider would have made an extra £120 out of you as oppose to the 12 month contract. If your phone broke down after 12 months, you are screwed since nearly all phones only offered with a 12 month warranty. Fixing it will cost an arm and a leg, terminating your contract will incur a penalty charge of original contract monthly cost multiplied by the number of months remaining on contract, or buying a replacement phone, which will cost almost as much.

On the 12 month contract, you can upgrade to a new phone and with plenty of customer retention schemes running at the moment on various networks, I'm sure they can offer you a pretty decent phone (depending on usage of course) and a discounted tariff (12/18 month contract renewal are always negotiable).

What is the general view on this? I don't understand how people can get ripped off so easily (typical ripp-off Britain) unless I'm missing something inbetween

 

[semi-pro waster]

When I get my new phone(around September time as I'll be back in the UK) I won't be going for an 18 month contract because I rarely keep a phone for anywhere near that long as my primary phone. Over the last year I've used about 4 phones although that was partly to do with breaking one but anyway I tend to get bored of a phone after a few months and/or it stops working as well in the case of the K750/W800.

As to why people go for 18 month contracts, if they are the only ones with any sort of incentive attached(free X-Box 360, PSP or free line rental) then some people will always go for 'something for nothing' even if it isn't actually worth the same as will be paid over the course of the contract.

I don't think I've ever had my current provider offer me a deal as good as I would get for signing up to a new contract because I am not that valuable a customer to them. I know roughly what my usage will be so I buy a contract to suit that and given how easy it is to get a PAC code and keep my number I don't begrudge a service provider not going out of their way to keep me. I have a choice just as they do so I change my contract/provider more or less once a year, I get a new phone and the company gets a customer who might be worth it for them.

 

[Dolph]

It all depends on the deal and your own personal circumstances and opinion whether an 18 month contract is worth it. If they are providing you with things you are going to use, and you chose your phone well, there's no reason to specifically avoid them, but a lot of the deals out there aren't particularly great, so it's important to think about it carefully.

To give you an idea though...

12 month racoon package

240 mins
120 landline mins doubled for 6 months

18 month raccoon package

240 mins
120 landline mins doubled for 6 months
200 x-net minutes extra free for the first 6 months
1000 SMS per month for 18 months
Free insurance
Free answerphone retrival (rather than included in minutes)
Free Broadband
magic number (1 initially, additional number every 6 months)

You can see a similar thing with other networks (especially T-mobile, compare the relax versus the flext tarriffs)

It's really just a case of balancing your needs. If you don't want an 18 month contract, that's fine, but you won't get the best deal in terms of package, it's a trade off, and only you can decide whether or not it's a good one for you

 

[Haly]

It's really just a case of balancing your needs. If you don't want an 18 month contract, that's fine, but you won't get the best deal in terms of package, it's a trade off, and only you can decide whether or not it's a good one for you

Yup
Personally I've found with customers that the majority who go for 18 month deals are the ones that are more interested in the actual plan rather than when they can upgrade their phone. People who want a phone with the latest features all the time, seem to go for 12 month contracts so they can get something new faster.
Admittedly where I work, CPW, has the advantage that we can offer insurance that means they can cancel their 18 month contract after 6 months so some people do that too.

I've not really noticed at work a huge difference in half price line rental deals, at most it seems to be (for example) 3 months half price on a 12 month contract and 6 months on a 18 month contract.
Very few 12 month contracts have no half price line rental at all, unless they're low tariffs.

 

[uk_sam]

I used to go for 12 month contracts because you get a brand new phone each year. However this can often be a pain as you have to spend time getting your PAC code and signing a new deal. I decided just to upgrade my phone and stick with the network I was on and they offered me a good monthly price for an 18 month contract. I also find that a lot of the decent 12 month deals require cashback which I have done before but I find an unnecessary hassle and another extra thing to worry about.

 

[Morba]

i think the main reason for the recent addition of 18 month contracts is because people are spending less on their phones over the course of a year.

previously the amount that networks paid the dealers in commision and the savings given on handsets, the networks wouldnt start making money back from the consumer until about 10 months.
now more minutes and more text and data bundles are being given and price plans are cheaper per month, they make money back later than before. so locking someone in for 18 months means that come the end of the contract, the average user would now have started paying something to the network in 'profit'