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Phones

EU ban on 36-month contracts has limited UK effect

The European Union has made it illegal for any mobile-phone operator to offer contracts that are longer than 24 months, but, thankfully, they were rare in the UK anyway.

The European Union has made it illegal for any mobile-phone operator to offer contracts that are longer than 24 months. The rule, brought into force on 1 May this year, will have little effect on Brits, though, because only one UK network has recently offered a 36-month contract, according to the founder and director of BillMonitor, Dr Stelios Koundouros.

Some reports suggest the price of short-term mobile-phone tariffs has increased because of the EU ruling. Dr Koundouros told us over the blower that he believes the EU acted pre-emptively to protect consumers from absurdly long contracts, as, over time, it observed the standard tariff length increasing from 12 to 18 and then 24 months.

Dr Koundouros claims many of those who've signed up to longer-term contracts are low-usage customers paying as little as £5 per month. Arguably, they may have been better off with a pre-pay phone but were encouraged to sign up to a cheap contract, perhaps with the lure of a free handset.

In general, opting for a 24-month contract is an economically superior choice to an 18-month contract. The monthly cost is usually lower and the extra six month tie-in shouldn't matter too much. There's also the likelihood of getting a better phone for free. You just have to contend with the nagging feeling that you're missing out on a wave of new handsets.

Although the EU ruling also forces companies to offer 12-month contracts, they'll generally be appalling value for money. We'd advise most people to steer clear of them.

Let us know in the comments section below, or on our Facebook wall, what you make of the EU's latest ploy to bring those pesky operators in line. Also, what do you think is the optimal contract length?