New EU Law Bans 3 Year Contracts

New EU Laws proposed in November 2007 are expected to come into force on May 1 2011.

Under the law, Mobile Operators and retailers will be forced to offer contracts that are no longer than 24 months - effectively banning the option of 36 month contracts.

As part of the new law, Mobile operators have to offer 12month contracts as an option.

Three year contracts were being increasingly offered as expensive Smartphones were provided free of charge to users signing up for three year contracts.

Three year contracts were a way for the operators to recoup the cost of providing free smartphones.

However the EU argument has been that three year contracts were not in the best interests of customers as customers were often tied to the same handset for the duration of the contract meaning that upgrading to newer phones was not easy - committing the customer to use what easily becomes an obsolete phone.

As well as being committed to use what becomes an obsolete phone users were also committed to a contract that no longer suites their requirements.

Technologically, three years is a lifetime in the constantly changing world of technology.

Perhaps the banning of three year contracts will see Smartphones either being partially paid for upfront by a customer wanting a contract with a Smartphone or alternatively still being able to have a free Smartphone as part of a contract but pay significantly more per month for the privilege.