LONG contracts for handphone and Internet broadband subscriptions may soon be history.

And if the Infocomm Development Authority (IDA) has its way, the penalties that home subscribers pay for breaking these contracts early will be pegged to the length of time left on them.

The IDA also hopes telcos will consider dropping the offers of free gifts such as laptops and LCD television sets at the signing of contracts of under 24 months.

IDA is now inviting feedback from the public and industry on these recommendations, contained in a consultation paper it released this week.

The changes, it said, are aimed at improving competition and giving consumers more freedom to choose providers and subscription plans.

IDA said it reviewed telcos? business practices on the back of consumers? complaints about ?unduly long contracts? and high early-termination penalties.

To come up with its paper, it looked at the plans of SingTel, StarHub, M1 and Pacnet available as of Tuesday. Public feedback is now sought on:

The length of contracts: These should last up to two years, down from the current three.

Early termination charges: The penalties payable by a subscriber who ends his contract early should be graduated, depending on how long he has been on it.

Free gifts for signing contracts: The IDA proposes that telcos consider dropping this for contracts of under 24 months to cater to consumers who may prefer short-term, no-frills contracts.

This story was first published in The New Paper on 27 December 2008.