Save, make, understand money

Household Bills

The pros and cons as broadband contract length rises from 12 to 24 months

Paloma Kubiak
Written By:
Paloma Kubiak

A decade ago, providers typically offered 12-month broadband contracts, but now, many customers choose to lock into 24-month deals. Here are the pros and cons of fixing for longer.

Broadband contracts are getting longer, with the average duration now at 18 months, according to data from two separate switching and price comparison websites.

Contracts typically last between 12 and 24 months depending on the provider, but when broadband was initially available, 12-month contracts were common, Ernest Doku, telecoms expert at Uswitch.com says.

“Providers have steadily introduced longer 18 and 24 month contracts as more customers chose broadband for their home. Our switching data suggests that 18 months is the current average contract length,” Doku adds.

This is echoed by Alex Tofts, broadband expert at Broadband Genie, who says: “Over the past few years, providers have gradually shifted towards longer contracts for home broadband.

“A decade ago, 24-month contracts were a rarity, but our latest data shows they make up more than a quarter of the most popular deals on the market. Meanwhile, 12-month offers have started to fall out of fashion, with only around one in ten of current packages.”

Broadband Genie added that as recently as 2019, the average length of contract was less than 14 months, but the impact of more two-year deals means it is now over 18 months.

Source: Broadband Genie

Shorter-term contracts are still available

Doku explains that some providers do still offer shorter-term contracts, such as nine-month contracts typically geared towards students living in student accommodation during the academic year but who move out during the summer.

He adds: “Some also offer rolling or 30-day contracts for customers looking for flexibility, a short-term solution – if they’re planning to move house soon – or if they simply don’t want to sign up for a long-term contract.”

Tofts adds that shorter deals are becoming less common, and warns: “Providers usually charge a premium for these deals, making them not great value for money.”

Major benefit of longer broadband contracts

Doku explains that as providers try to get you to commit for longer, they’ll often offer incentives, such as gift cards, vouchers and discounted introductory pricing, which are frequently absorbed into contracts of a longer duration.

“For example, BT’s 67Mb Fibre 2 product is available today for £31.99 with a £100 virtual reward card and no set-up cost on a 24-month contract, whilst the same package is £38.99 per month plus an initial £29.99 fee when opting for a shorter 12-month duration. The additional incentive could not only help counterbalance the coming mid-contract price rise, but also help with other household bills,” Doku says.

Tofts adds that providers may offer discounts for the first few months or even bill credit.

The disadvantages of longer broadband contracts

You may think you have certainty on the price you’ll pay over the whole 18-month or two-year period, but you could still face mid-contract price hikes, Doku and Tofts warn.

Doku says: “With longer-term contracts, you are likely to face mid-contract price hikes depending on your provider. This year, customers are at a risk of facing increases of up to 17.3%.

Tofts says: “With mid-contract price hikes on the way next month, those tied into a deal will largely be forced to grin and bear it if they are in contract with a provider that applies these annual rises.”

He adds that the other downside to longer contracts is that once customers are locked in, they don’t have much flexibility if they feel they are being under or over-served.

“If they want to switch deals or change providers, they’re likely to have to either wait it out or pay a hefty exit fee.

“As broadband contract lengths extend, it’s also easy to forget how long you’ve been on a deal. This means you risk overpaying when it finally expires and you have the chance to switch to a cheaper option.”

Doku concludes: “Ultimately, both shorter and longer-term contracts have their own benefits, so when deciding, weigh up whether flexibility or cheaper long-term prices with promotions is more important for you.”