Are you looking for a new broadband provider or plan for your home? One of the biggest consideration points for people is to weigh the pros and cons of a fixed broadband contract versus a non-contract/open term plan.
In this blog post, the glimp team will give a detailed account of the pros and cons of both broadband plans but firstly we will define what each one is. A fixed term contract plan is where you sign up for a broadband plan for a specific period (e.g. 12 or 24 months) and in return for your commitment, you receive gifts such as a free modem or subscription services. In contrast, with an open plan, you pay more and do not receive these bonuses but you will have the ability to leave the current plan with no termination fee consequences.
The benefits of signing a fixed term broadband contract are mainly to do with the free gifts that you gain.
For example, if we look at the Spark Broadband packages, they are currently offering a free modem and standard connection, $300 account credit, and streaming service subscriptions for new customers that sign up to a 12-month broadband plan. The costs over the long run can be substantially less.
The main drawback of a fixed broadband contract is that if you decide to end your contract early, you will face financial penalties. Cancellation fees tend to cover the free products and services that you received from signing up – for example, free modem, free installation and any of the free add-ons that the broadband provider supplied.
The main benefits of signing up to an open plan broadband deal is the flexibility and freedom that you gain. If you are looking for a short-term broadband plan then an open plan may be right for you. There are some broadband providers that offer 6-month contracts but there are people that require broadband for a shorter time than that. Students renting for a University semester are a good example of people who would be drawn to this type of plan.
The downsides of an Open Broadband plan are to do with the costs. The cost of broadband per month is generally greater versus a fixed term contract. Furthermore, as you are not making a big commitment to the broadband provider, they won’t be inclined to offer you free gifts and add-ons. You will have to make sure you have your own modem and know how to set everything up yourself as you won’t have the luxury of a free installation.
In general, if you are looking for a short-term broadband option, we suggest going for an open plan and if you are able to commit to a longer agreement, we suggest going with a fixed term contract. Compare Broadband NZ wide with our free broadband comparison tool.
We have information available from Auckland Broadband Providers, Wellington Broadband Providers and can help with comparing other common household utilities as well.
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