Contract phones

Frequently asked questions about mobile contracts

What is a phone contract?

One of the most popular methods of purchasing a mobile phone in the UK, is known as a contract deal. Basically, with a contract you make an agreement with a network for access to their service, and to access this service they supply you with a SIM card which will fit almost all mobile phones, for you to access the network and make and receive calls. The main benefit of signing a minimum term contract is the network will usually subsidise the cost of a mobile phone - generally handsets have a retail cost price of between £200 to £500.

Summary of benefits a contract provides:

• Free mobile phone
• Inclusive minutes, text and data for one fixed monthly fee
• New handset at fixed intervals (when upgrading)
• Calls to network Customer Services usually free of charge
• Better call rates, nationally and internationally

Contract phones in depth

Mobile phone contracts are terms of agreement between mobile networks, and the end user, for the supply of airtime service, accessible for a fixed monthly fee. In return for the monthly payments, networks will generally provide an inclusive amount of airtime for calls, plus an allocation of text messages, as well as an amount of data for web browsing activities.

The contract does not guarantee supply of service, as it is not possible to account for local conditions where signal may be blocked, or for technical problems with the network, or atmospheric changes which can also effect reception quality (thunderstorms, etc).

Mobile phone contracts are for a minimum duration, either 12, 18 or 24 months. 12 month phone contracts are less freely available these days, with networks preferring 18 month contracts or more even longer 24 month contracts. Generally, when signing an airtime agreement with the networks, the cost of a new mobile phone will be subsidised, removing the need to purchase a new device. The handset does not form part of the contractual agreement, the agreement is the payment and supply of network services for the minimum period stated. Most mobile phones are supplied free of charge with contract agreements, although higher end devices are usually charged for, or only delivered free on high end, long term tariffs and agreements.