What happens when a mobile contract expires?

Ethan Miller/Getty Images News/Getty Images

A pay-monthly mobile phone contract enables you to pay off the cost of a new handset in monthly installments, rather than buying outright. To make it worth their while to provide a free or subsidised handset, mobile networks tie you into 12-, 18- and sometimes 24-month contracts.

Once this contract is over, you'll have a number of options.

Rolling contract

You don’t necessarily need to do anything when your mobile contract expires. Once the initial 12-, 18- or 24-month period has expired, your network will typically continue to deliver normal service on what is called a “rolling contract.” Under a rolling contract, the terms remain the same, but you are free to cancel after giving one month's notice. If you're not yet sure whether you wish to continue with your current provider or take a better deal, you can use this time to shop around. You may also wish to negotiate with your current contract provider to improve the terms of any subsequent contracts, for example by providing you with more voice minutes, texts, data or a new handset.

The handset

You get to keep your handset at the end of your contract, even if it was free when you took out the contract. The contract is designed so as you pay off the cost of your phone with each bill. Once you’ve paid your last bill in the original contract term, the phone is yours to do with as you wish. You may decide to continue using it, sell it or recycle it.

Option to upgrade handset

In order to retain your custom, your network provider may offer you a free upgrade. In return for the free upgrade, you will need to sign up to a new contract, the price and length of which is informed by the handset and benefits you chose. Depending on which network you are with, you may receive a call or text prior to your contract period expiring. This contact will typically be an enticement to renew your contract by offering you a free handset.

Option to cancel

Once the original term of the contract has expired, you are free to end the contract with the network provider. Network providers typically require approximately 30 days written notice before terminating a contract once the original term has expired, otherwise you roll over to the next month. If you want to change provider as soon as the contract expires, contact your current provider 30 days prior to your contract end date.

Keeping your number

You can terminate your contract and still keep your phone number. In order to do this, you'll need a porting authorisation code or PAC. Get this from your existing network provider when your contract expires. It's normally delivered in a few hours via text message. Once you have this, give it to your new network provider so it can port your number to your new contract.