Telcos urge consultation on proposed changes to ‘loyalty contracts’

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Telecommunication companies Vodafone, Telenor and Magyar Telekom are seeking consultation with the government about a bill submitted to Parliament by MPs of the governing Fidesz party that would limit the terms of “loyalty contracts” to one year, the companies told Hungarian news agency MTI.

Vodafone said that, if the bill passes, consumers could only gain access to services under less favorable circumstances, as prices were designed with two-year fixed contracts in mind.

Telenor said consumers already have the option of signing up to different types of loyalty contracts and that current regulation was sufficient. The company added that clients would find it harder to buy expensive phones in one instalment rather than over a longer period of time, which the current contracts allow.

Magyar Telekom also mentioned the difficulty of buying expensive telephone sets and noted that consumers can choose if they want to participate in loyalty contracts and for what period of time.

Telcos, ISPs and cable television companies use loyalty contracts to commit subscribers for up to two years in exchange for discounts and other benefits. Apart from the one-year limit, the proposed changes would also allow subscribers who have such contracts to cancel them, without penalty, if the service provider unilaterally changes the contract to the disadvantage of the subscriber.

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