What contract length should you expect on a business phone system?

For a UK business with ten or fewer employees, Ofcom's rules say a business phone contract can't have a commitment period longer than 24 months, and every provider must offer at least one 12-month contract. Cloud phone systems that bill monthly, such as Olatti, don't need a long term at all: you pay in advance for the month or the year and cancel at the end of the period you've paid for.

The thing to read before you sign is not the headline term. It is what the contract does when the term ends, when the price changes and when you want to take your number somewhere else.

What do Ofcom's rules say about contract length?

For businesses with ten or fewer employees, no phone or broadband contract can have a commitment period longer than 24 months. That is General Condition C1.11, set out on Ofcom's page on the General Conditions that protect business customers (opens in a new tab).

The same page lists what applies to every business customer:

• A provider must offer at least one 12-month contract for each service (C1.13).
• You must be sent end-of-contract and annual best tariff notifications (C1.21 to C1.36).
• If the provider makes a change that isn't to your benefit, you get at least one month's notice and the option to leave the contract without a penalty (C1.14 and C1.15).

For businesses with ten or fewer employees there is more. Termination conditions mustn't discourage you from switching provider (C1.8), renewing at the end of a commitment period needs your consent (C1.10), and a provider can't extend your contract's duration when you buy an extra service without your consent (C1.12).

If you have more than ten people, check the contract itself. Those protections are written for the smaller group, and I wouldn't assume they cover you.

How long are most business phone contracts in practice?

I don't have a survey of what UK providers quote, so I won't give you a typical length. Ofcom guarantees a 12-month option and caps the term at 24 months for businesses with ten or fewer employees; for anything longer, ask why.

My first telecoms job was in 2012, at a firm that sold on-premise phone systems to dentists, garages and solicitors. The leasing companies preferred hardware, because more kit meant more finance and more commission. A long term followed the box. That is why the term on a quote tells you something about what is being sold: a long term can mean somebody is financing equipment.

What should you check in a phone contract before signing?

Check five things, because they decide what leaving costs you far more than the number of months does:

• What happens at the end. Does it renew on its own, and for how long? Ofcom requires renewal at the end of a commitment period to have your consent if you have ten or fewer employees, so ask how that consent is collected.
• What a price rise does. Ask what notice you get and whether you can leave without a penalty if the price goes up.
• What leaving costs. Ask for the early termination charge as a figure, in pounds, for your current month.
• Who owns the handsets. If the phones are on a lease, they may go back, or the lease may keep running after the service stops.
• What it costs to take your number with you. A number is something you have the right to use, not something you own, so the provider's terms decide whether it can leave and for how much.

Write the answers next to each other for each provider you're comparing. The comparison is usually clearer on that sheet than on the quotes.

What is the contract on Olatti?

Olatti has no long contracts. You pay for each user in advance, monthly or annually, and the subscription renews automatically. Cancelling a user or the whole subscription takes effect at the end of the billing period you've paid for, and charges already paid aren't refunded except where the law requires.

The plan prices are per user, per month, excluding VAT: Metered £6 on monthly billing or £5 on annual billing, Plus £20 or £17, Unlimited £25 or £21. Annual billing is charged for twelve months at once, so a Plus user on annual billing is £204 up front. Current prices and the founding member offer are on the pricing page.

I'm not claiming a notice period or a minimum term beyond the month or year you've chosen, because the terms are the document to read for that. They are on the terms page.

What happens to your number and equipment if you leave?

After you close an Olatti account you have 30 days to export your content and port your numbers out. Porting out of Olatti is free, and you can take your number with you. Content is normally deleted within 90 days.

Desk phones bought from Olatti are yours to keep. They are Yealink models, from £75 including VAT for the T31W, and they're listed on the hardware page.

Moving in costs something too. Porting a number to Olatti is £20 per number when the port is raised, then £5 a month for each ported number, on top of the plan, excluding VAT. Don't cancel your current provider until the port has completed. Keeping your number when you switch goes through the steps, and how to switch provider covers the order of work.

Is a longer contract ever worth it?

A longer contract is worth it only if it buys something you can name and price, such as a discount you've compared against the shorter term, or equipment you want financed. A long term that comes with no discount is cost without a benefit.

For a UK team on a cloud phone system the usual choice is between a monthly price and an annual one. Olatti's annual billing saves up to 17% against monthly, and you pay for the year in one go. If cash is tight, monthly billing costs more per user and lets you stop sooner. That trade is yours to make, and the arithmetic for a team of your size is in what a business phone system costs in the UK.

Frequently asked questions

What is the longest contract a UK business phone provider can ask for? For a business with ten or fewer employees, 24 months, under Ofcom's General Condition C1.11. Larger businesses aren't covered by that cap.

Can I leave a business phone contract early? You can if the provider makes a change that isn't to your benefit and you leave within the notice Ofcom requires, without a penalty. Otherwise the early termination charge in your contract applies, so ask for it as a figure before you sign.

Does a cloud phone system need a long contract? No. A cloud system has no exchange box to finance, so the term can match how you pay. Olatti bills monthly or annually in advance.

Will my contract renew automatically? Check the wording. Olatti subscriptions renew automatically and cancel at the end of the billing period. For businesses with ten or fewer employees, Ofcom requires your consent to renew a commitment period.

Where do I start? The business phone system page explains what Olatti does for a UK team, and you can start for free (opens in a new tab) with a 7-day trial and no card.