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Mobile operator Sky Mobile, which is estimated to be home to around 4-5 million subscribers in the UK and harnesses O2’s virtual (mvno) network platform, will today switch from using 12-month minimum term contracts and instead adopt a choice of either a 24-month or 30-day term for new customers.
Longer contracts typically save new customers more money, at least during your first term, albeit with the caveat that they also lock you in to the service for much longer. Put another way, the end-user takes on more risk, which can be a problem if things go wrong, but the operator gains more economic certainty and so can price lower.
On the flip side, shorter 30-day contracts tend to reverse that equation, which is why they cost more. Admittedly providers like Sky Mobile run so many different special offers that it’s hard to judge the impact from changes like this, due to the difficulty of being able to establish the provider’s true pricing baseline.