Leaving a phone or internet contract early

Plans change, prices rise, better deals appear and circumstances shift. Sometimes you'll want to leave a phone or internet plan before the end of a contract. That's usually possible, but it can come with costs. This guide explains what to check, so you can work out whether leaving makes sense and how to do it without surprises.

Start with your documents

The ACMA's advice is that if you want to exit early, you should check your contract or Critical Information Summary (CIS) to see what you have to do and what you may have to pay. Find:

• your contract or customer terms;
• the CIS for your plan (ideally the copy from when you signed up);
• any agreement for a phone, modem or other device you're paying off;
• your latest bill.

Our guide to the Critical Information Summary explains what's in it.

What you might have to pay

Early termination charges

Some contracts include a charge for leaving before the minimum term ends. The CIS should say whether an early termination charge applies and how it's calculated, for example as a fixed fee or an amount that reduces as the contract runs.

Remaining device repayments

If you're paying off a phone, tablet, watch or modem through your plan, leaving usually means paying the remaining balance. The CIS should explain what happens to device repayments if you change or cancel your service. Often the remaining amount is added to your final bill.

The current billing period

You may need to pay for the rest of the current billing period, depending on your provider's terms.

Equipment returns

Some providers ask you to return equipment, such as a modem, when you leave. Check whether this applies and how to do it, to avoid charges.

Month-to-month plans

Many internet and mobile plans are month to month. These generally don't have an exit fee, which makes switching easy. But if you bought a device on repayments with the plan, you'll usually still owe the remaining balance.

Is it worth leaving?

Compare the total cost of staying with the total cost of leaving:

1. add up what you'd pay to leave (exit fees, device balance, any equipment costs);
2. add what the new plan would cost over the same period;
3. compare that with what you'd pay by staying until the end of your contract.

Sometimes it's worth paying to leave; sometimes waiting a few months saves money. Also consider non-price reasons, such as poor coverage or unreliable service.

If your provider changes your plan

Providers sometimes change plans, for example by raising prices. Your contract should explain what happens if the provider makes changes and whether you can leave without paying an exit fee in that case. Read any notice of changes carefully, check your contract and ask your provider what options you have.

If the service doesn't work

If you want to leave because the service doesn't work as promised, such as constant dropouts, very slow speeds or poor coverage, raise it with the provider as a complaint first. Explain the problem, provide evidence and ask what it will do. Depending on the circumstances, you may be able to leave without paying some costs. If you can't resolve it, contact the Telecommunications Industry Ombudsman. See complaints and the TIO.

Locked phones

Some phones sold with plans are locked to the provider's network, which means they won't work with another provider's SIM. If you're leaving, ask your provider whether your phone is locked and how to unlock it, and whether there's any charge. Check before you buy a new SIM.

Keep your number

If you want to keep your phone number, don't cancel your old service. The ACMA says only active numbers can be ported, and if a number is disconnected you lose your rights to it. Sign up with your new provider and ask it to port your number. Your old service usually ends automatically when the port completes.

The ACMA's rules say your old telco must port your number if asked, even if you owe it money, and that the new telco must tell you there may be costs for changing telcos, such as an early termination fee. See keeping your number.

Internet: avoid a gap

For home internet, ask your new provider how the switch will work and when your new service will start. Don't cancel your old service until you know the new one is ready, unless the new provider says the switch will happen automatically.

After you leave

• Check your final bill carefully against your contract and CIS.
• Make sure any equipment you returned is recorded.
• Cancel any direct debits only after the final bill is settled.
• Keep records of the cancellation, including dates and reference numbers.

If the final bill includes charges you don't think are right, contact the provider. If you can't resolve it, the TIO can help.

A worked example

Imagine you're eight months into a plan with a phone on repayments, and you've found a cheaper SIM-only plan with another provider. Before switching, you'd:

1. check the CIS and contract for any early termination charge on the plan itself;
2. check your latest bill or account for the remaining phone balance;
3. ask your provider whether the phone is locked and how to unlock it;
4. add the exit costs to the cost of the new plan over the next few months;
5. compare that total with the cost of staying.

If the numbers favour switching, you'd sign up with the new provider, ask it to port your number, wait for the port to complete and then check your old provider's final bill.

Bundles and multiple services

If your services are bundled, for example internet and mobile with the same provider, or several mobiles on one account, leaving one service may affect the others. You might lose a bundle discount, or the remaining services might move to a different price. The CIS should explain what happens to your other services if you change or cancel one. Ask your provider before you make changes, and get the answer in writing.

Moving house

Moving doesn't automatically end a contract. If your provider can supply the service at your new address, you may be able to move the service with you. If it can't, check your contract for what happens. Contact your provider as early as possible before you move.

Questions to ask your provider before leaving

1. Is there an early termination charge, and how much would it be today?
2. What is the remaining balance on any device?
3. Is my phone locked, and how do I unlock it?
4. Do I need to return any equipment?
5. What will happen to my other services or bundle discounts?
6. When will my final bill be issued?

Ask for the answers in writing, or note the date, name and reference number of the call.

Key points

• Check your contract and Critical Information Summary before leaving.
• You may have to pay an early termination charge and any remaining device balance.
• Month-to-month plans generally have no exit fee, but device repayments still apply.
• Keep your service active and port your number to keep it.
• If you're leaving because the service doesn't work, complain first; the TIO can help.