Telecoms Contracts: 6 Hidden Clauses Every Business Should Check Before Signing

Choosing a phone system for your business? You’ll likely be presented with a contract that looks straightforward – but it’s often anything but.

At Planet Telecom, we’ve reviewed hundreds of contracts from other providers, and we’ve seen how small businesses are quietly locked into long-term, expensive deals that are nearly impossible to escape.

Before you commit to anything, take five minutes to check for these common traps. It could save your business thousands of pounds.

1.  Is the price just a “promotional” offer?

It’s easy to be drawn in by a low monthly price – but look closely.

Many telecoms deals start with a reduced “introductory” rate, only to shoot up after the first year or two. Unfortunately, the full post-promo pricing is often buried in the small print.

What to check:

• How long the low rate lasts

• What the price becomes after that

• Whether the provider clearly confirms the long-term cost

We’ve seen bills jump from £200 to over £500/month once temporary credits expire – and by then, you’re locked in.

2. Is the contract longer than 3 years?

Contracts that run for five, six or even seven years are surprisingly common – and often come with little flexibility.

Watch out for:

• No early exit options

• Lengthy minimum terms

• Vague promises of “upgrades” or “rebates”

A 7-year deal might seem manageable upfront, but things change. Your business might grow, your needs might shift, or better technology might come along – and you’ll still be stuck.

3. Are you signing a separate finance lease?

This is a big one – and often not explained clearly.

Many providers bundle their phone systems into third-party finance agreements. That means you’re not just signing a service contract — you’re taking out a lease, often with a finance company you’ve never heard of.

What to look for:

• Mention of a finance provider or “funder”

• Wording like “unregulated lease agreement”

• A requirement to pay the full amount even if you stop using the service

These agreements are usually non-cancellable, with no cooling-off period. And in most cases, you won’t own the phones even after years of payments.

4. Does the deal include a “loyalty rebate” or hidden credits?

Some providers lower your monthly bill with a “loyalty rebate” – a discount that quietly disappears after 12 or 24 months.

What seems like a great price at the start can suddenly double, and because it’s tied to a finance agreement, you can’t just walk away.

Ask yourself:

• Is this price reliant on a rebate or credit?

• How long does that rebate last?

• What happens to my bill once it expires?

If the full, ongoing cost isn’t crystal clear – ask for it in writing.

5. Are the phones clearly priced – and fairly?

You should always know exactly what you’re paying for – especially when it comes to hardware.

Some providers use custom-branded phones, bundle in unnecessary extras, or avoid publishing prices altogether.

Red flags include:

• No public pricing for the phones or software

• “Extras” like voicemail or call logs being treated as premium features

• Rebranded or proprietary equipment with unclear value

We’ve seen businesses charged £50,000+ over time for systems worth a fraction of that. Don’t get caught out.

6. Is there a clear breakdown between service and equipment?

Sometimes you’ll be quoted one monthly figure – but that figure actually covers two contracts: one for the telecoms service, and another for the equipment lease.

That matters, because if things go wrong or you want to exit, you’ll be dealing with multiple companies, multiple agreements, and multiple bills.

Before you sign, ask:

• How much am I paying for service?

• How much is for equipment?

• Who am I actually signing with?

Lack of clarity here can cause real pain later.

Final Thoughts

A recent BBC investigation revealed a small business locked into a £54,000 phone contract over 10 years – just for five handsets and basic features. They thought they were on a great deal… until the credits ended and the finance kicked in.

It’s sadly common – and almost always avoidable.

How Planet Telecom is Different

At Planet Telecom, we do things properly:

• No 7-year lock-ins

• No hidden finance companies

• No bait-and-switch rebates

• Clear, honest pricing — always

• Friendly UK support whenever you need it

Need help reviewing a quote or contract?

We’ll check it for you – free of charge, no pressure, no pushy sales pitch.

We’ll simply tell you whether it’s fair, and what to watch out for.

Request your free contract review here