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Going back to 2004, if you took out a phone agreement, you could only guarantee it would be for a 12 month time period. You would most probably have been given a free mobile phone by your local phone dealer and have been given a bundle of inclusive minutes plus a pre determined text allowance. When you got in to the 11th month of the agreement, the network provider would have called you and offered you another free mobile phone in an attempt to get you to register for another 12 month contract.
As 2006 approached, numerous shops and mobile phone network companies started to substitute the 12 month agreement with the longer 18 month term agreement, which in turn meant that the customer would have to keep their mobile phone for approximately 6 months longer compared to previous years. There are two big winners from the longer 18 month term mobile phone agreement, and you can be sure that the consumer is not one of them.
As you can imagine, the biggest winner in the longer term agreement length would be the mobile phone network provider, as in theory, they have now lowered their costs regarding providing customers with free mobile phones by around one third. Another silent winner was also the mobile phone insurance companies, as a lot more consumers decided to get mobile phone insurance to protect their mobile phones, since they understood that there was a longer period where it might get lost or thieved, with no chance of another free phone until the end of the 18 month agreement.
Within a year of the new longer mobile phone agreements, the network companies altered the rules once again by increasing contract terms by another 6 months to a long 24 month time period. Again the mobile phone network providers lowered their charges as they only provide you with a free phone every two years, their savings must run in to the millions every year. With the networks saving money, the customer is left to take the gamble of protecting their mobile phone with mobile phone insurance, or opting to take the risk of it lasting two complete years and not get lost, thieved or damaged over the 24 month period.
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