Mobile providers locking customers in for longer

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Mobile operators are locking users in for longer as contracts get increasingly stretched out, according to a report.

Almost two-fifths of mobile users are in a 24-month contract, whilst just 12 per cent have a 12-month deal, uSwitch data has revealed.

Three-year deals have become increasingly popular as well, with over 3,300 available on the market, but new EU legislation will outlaw such contracts.

There are only 279 12-month contracts currently available, 676,000 18-month deals and 939,000 24-month offers.

“As a general rule, the longer the contract, the lower the monthly fee, so it's not surprising that consumers are getting tied in, especially given the current financial constraints most are experiencing,” said Ernest Doku, technology expert at uSwitch.

"But, while long contracts help spread the cost of expensive handsets, it's alarming to see how popular 36 month deals have become.”

The EU legislation is due to come into force from 1 May and will mean retailers have to offer 12-month contracts, whilst any deals longer than 24 months will be banned.

However, it is unlikely free phones will be included in 12-month contracts, according to uSwitch.

“This may help those just after a basic handset to call and text from, but it will be very surprising to see best-selling handsets being offered for free on a 12-month deal,” Doku added.

“If you can afford to pay for your phone upfront, SIM-free could be the best option. But for those that can’t afford the initial outlay, a 24-month contract will remain the most cost effective way to lay your hands on a shiny new smartphone for free.”

Last month, uSwitch research indicated a number of mobile companies had used the rise in VAT to cover up price increases in their contracts.

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