Who Gains From The 24 Month Phone Agreement?




Going back to 2004, if you took out a phone agreement, you could only guarantee it would be for a 12 month period of time. You would most probably have been given a free phone by your local mobile phone retailer and have been given a bundle of inclusive minutes plus a pre determined text allowance. When you got in to the 11th month of the agreement, the network provider would have got into contact with you and offered you another free phone trying to get you to sign up for another 12 month contract.

As 2006 approached, many stores and mobile phone network companies started to substitute the 12 month contract with the longer 18 month period contract, which in turn meant that the consumer would have to keep their mobile phone for around 6 months longer compared to previous years. There are two big winners from the longer 18 month term mobile phone contract, and you could be certain that the consumer is not one of them.

As you can imagine, the biggest winner in the longer term agreement length would be the mobile phone network provider, as in theory, they have now cut down their costs regarding providing customers with free phones by around one third. Another silent winner was also the mobile phone insurance providers, as more consumers decided to take out mobile phone insurance to protect their mobile phones, since they understood that there was a longer period where it might get lost or stolen, without any option of another free phone until the end of the 18 month agreement.

Within a year of the new longer mobile phone agreements, the network companies changed the guidelines again by increasing contract terms by another 6 months to a long 24 month time period. Again the mobile phone network providers decreased their costs since they only supply you with a free phone every two years, their savings must run in to the millions every year. With the networks saving money, the customer is left to take the gamble of protecting their mobile phone with mobile phone insurance, or opting to take the risk of it lasting two full years and not go missing, stolen or damaged over the 24 month period.

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