12 Month No More

• Read full article
• Share this article
• Related articles

O2 stop offering 12 month mobile contracts

Effective immediately UK network o2 have stopped selling 12 month mobile phone contracts for all their handsets. This will apply to both O2’s consumer channels, its own stores and Carphone Warehouse stores, and online and telesales.

This move could reflect the broader tendency towards 18 month contracts within the market, statistics show that 18 month contracts are dominating the market, with over 84% of contracts being 18 months in July. Most networks have tried to discourage 12 month deals by either not offering the most attractive handsets for free or by having less attractive line rental bundles.

The trend towards longer contracts can also be seen in the increase of customers taking 24 month contracts, between January and July they increased from 1% to 6% of the market. But the market share for these two year deals is still small because customers still like to change their handset regularly and keep up to date.

Customers have resisted signing up to long deals because of the way the mobile phone market changes so quickly and handsets can soon become out dated in terms of design and features. The top-selling handset on contract two years ago was the Sony Ericsson W810i, which has been surpassed by many new Sony Ericsson phones in terms of features, not forgetting the other manufacturers mobiles also.

Meanwhile, 12 month contracts have decreased, statistics have found that the market share of 12 month contracts did initially increase between January and July from 11 %, to 17% in March, but have since declined to 10% in July.

So are we really moving away from 12 month contracts because we do not need them, or because there is so little to offer on a 12 month contract? It seems we may never know if other networks follow suit and stop the 12 month contracts.