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Telefónica-Movístar ditches mobile contract release penalties
thinkSPAIN , Wednesday, September 11, 2013

TELECOMMUNICATIONS giant Movístar plans to wipe out lock-in penalty clauses in its mobile phone contracts, leaving customers free to chop and change suppliers as they please.

A recent drive towards eliminating fixed periods that force customers to pay a fee to release themselves from a given operator means companies are beginning to see they are a barrier to client loyalty.

Jazztel is currently offering to pay up to 200 euros towards the lock-in penalty if customers break their contracts with other suppliers to move to them.

Orange continues to keep customers on a long-term contract with a release penalty, but with a points system meaning new mobile handsets or other related equipment can be purchased with a hefty discount or free of charge when enough are accumulated.

Movístar, in the meantime, plans to offer unlimited calls to customers on the highest mobile tariffs and to retail handsets not linked to them as operators.

Bosses at Telefónica España, the Movístar holding company, say they have realised contract release penalties may force existing customers to stay with them, but they put new customers off who do not want to have to commit to a given supplier long-term.

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