Have You Ever Pondered Why Phone Contracts Have Increased From 12 Months Long, Right Up To 24 Months?
Going back to 2004, if you took out a mobile phone contract, you could only guarantee it would be for a 12 month time period. You would most likely have been provided with a free phone by your local phone retailer and have been given a pack of inclusive minutes along with a pre determined text 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 phone in an attempt to get you to sign up for another 12 month contract.
As 2006 approached, numerous retailers and mobile phone network companies began to replace the 12 month contract with the longer 18 month term contract, which in turn meant that the customer would have to keep their phone for approximately 6 months longer compared to previous years. There are two big winners from the longer 18 month period phone contract, and you can be certain that the consumer is not one of them.
Understandably, the biggest winner in the longer term contract length would be the mobile phone network provider, as in theory, they have now lowered their charges related to providing customers with free phones by around one third. Another silent winner was also the mobile phone insurance companies, as more consumers decided to get mobile phone insurance to protect their phones, since they understood that there was a longer time period where it could get lost or stolen, with no option of another free phone before the end of the 18 month contract.
Within a year of the new longer mobile phone agreements, the mobile phone network providers changed the rules again by increasing contract time periods by another 6 months to a long 24 month period. Again the mobile phone network companies reduced their costs as they only supply you with a free phone every two years, their savings must run in to the millions each year. With the networks saving cash, the customer 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 full years and not get lost, stolen or damaged over the 24 month time period.
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