With these guidelines, the maximum contract period for all such services will not exceed 24 months. Consumers who sign on to contracts longer than three months and who terminate their contracts before the end of their contract period will no longer have to pay fixed early termination charges, but will see these charges decrease over time on a month-by-month basis as they serve out their contract.
In addition, operators offering these services must also ensure that these early termination charges do not include costs which they can avoid when the consumer terminates his service. Such costs could include back-end administrative and operational costs that the operator would not have to incur once the customer terminates the service.
The new IDA Singapore guidelines were prompted by consumers’ concerns that contract periods might be becoming unduly long, and early termination charges excessively high, which together hinder them from terminating the service and switching between operators. These guidelines were subsequently developed after a public consultation and a review by the Infocomm Development Authority of Singapore (IDA).
The guidelines seek to ensure that industry practices will be more reasonable and fair, and strike a balance between protecting the interest of both consumers and providing operators with the freedom to innovate in designing service plans, while enabling them to seek early termination charges on a cost-recovery basis.