Longer Contracts Becoming the Norm

A recent survey by JD Power in the US has seems to show that mobile phone owners are keeping their phones for longer and paying more for them.

The survey found that the average US user keeps their phone for 20 months and pays $78 a month,  17% and $10 more than in 2007.

This seems to show that the US market is going the same way as here in the UK – operators funding the cost of shiny new handsets with longer contracts and higher monthly costs.

A quick look at any of the sites that compare mobile phone deals will show you what we mean.

If you want an HTC desire with 400 minutes and unlimited texts on orange, a 24 month contract will cost you £30.00 a month while an 18 month contract will cost £35.00.

If you aren’t bothered about having a shiny phone, you can get a Nokia 1208 on the same tariff for £15.00 a month over 24 months, so over the full term, the HTC Desire will cost you £360 more than the Nokia 1208, not far off what the handset costs unlocked.

Operators are having to try and keep the monthly cost down to appear competitive but the latest handsets cost money, the only way to make the numbers add up is to increase the term of the contract, most operators are phasing out 12 month contracts for customers who want a handset, if you don’t want an upgrade you can still get them, or if you are prepared to pay for your handset.

We’re also starting to see 36 month contracts appearing, whether or not people will sign up to them remains to be seen but the networks seem to want to tie you in for as long as possible by dangling the carrot of a lower monthly cost.

In effect, your monthly bill is the cost of your services plus what are effectively repayments on a loan to pay for the handset, keep this in mind, check out the deals available online and haggle, negotiate with your network and don’t be afraid to walk away if they won’t give you the deal you want.

Very few operators are

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