Is No Contract Broadband More Expensive? Weighing the Costs

One of the most common worries about no contract internet is  “Will I pay more if I don’t sign a long-term contract?”

The short answer is yes, on average you could pay more on a monthly basis if you are compare with the absolutely cheapest internet out there—but potentially no, in the long run you have the ability to exit the subscription anytime you want without being forced to stay for a long term (EG: 18 months to 36 months).

The “Flexibility Premium”

Providers view long-term contracts as guaranteed income. Because no-contract internet customers can leave at any time, providers charge a “Flexibility Premium.” (They have to pay the bills, as it does cost them money to provide the service) You can typically expect to pay £5 to £10 more per month than you would on an 18-month plan for the exact same speed.

Upfront Costs

When you sign a 24-month deal, the provider often gives you a “free” router and free installation because they have you tied down for a long time. So they can recoup those costs over two to three years. If you end up existing a long term contract before the end of the contract (and after the typical 14 days cooling off period), the broadband internet provider will make you pay for all the remaining months in your contract , and this could include admin fees.

With 30 days rolling internet contracts or Monthly subscription broadband internet, you will likely face:

• Activation Fees: Usually between £20 and £60 (depending on the provider).

• Router Costs: You may have to pay for the hardware upfront or you subscription includes the renting of the router being used (But a fee would normally be charged if the rented router is not returned back at the end of the rental). 

• Delivery Fees: A small charge for shipping the hub.

How No-Contract broadband internet Can Save You Money

It sounds counterintuitive, but no-contract broadband can be the cheapest option in specific scenarios.

Scenario: The 7-Month Tenancy

• Long term Contract Deal: £25/month for 24 months. If you cancel after 7 months, the “Early Exit Fee” could be £15 per remaining month (£15 x 17 = £255 penalty + 7 Months you’ve already paid £25 per month). Total cost for using and exiting after 7 months = £430

• No-Contract or Monthly internet Deal: £35/month + £40 one-time signup fee. Total cost for 7 months = £285.

• The Winner: In this case, the no-contract deal is a clear winner, plus you don’t have to worry about the legal headache of debt collectors or credit score damage from unpaid exit fees.

The Bottom Line

If you know you will be in one place for 2 years, get a contract. If your life is in flux, the slightly monthly Internet Subscription would be a suitable solution where you’re only subscribing on a month by month basis (a rolling deal), hence it’s a “peace of mind” insurance policy.