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 under 24 months long.

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 have more freedom to choose providers and subscription plans.

IDA said it reviewed telcos' business practices on the back of consumers' complaints about 'nduly 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 at Tuesday. Public feedback is now sought on:

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

SingNet's 3Mbps unlimited and 25Mbps unlimited broadband plans, for example, come with 36-month contracts; StarHub's broadband plan MaxOnline ties a subscriber to a 28-month one.

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.

For example, a subscriber who has three months left on his contract should pay a smaller penalty then one with a year left.

Telcos here now levy between $300 and $800 in early-termination charges pegged to the length of the plan picked when the cellphone was bought, but some plans come with fixed, non-negotiable early-termination penalties.

Over in New Zealand, a subscriber on Vodafone's cheapest 36-month contract pays a $160 penalty if he breaks the contract within 24 months, and $30 after that.

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.

Free gifts with mobile phone contracts are common elsewhere. In Britain, the Nintendo Wii game console, LCD TVs and iPod Nanos are dangled before consumers who buy a phone and take up 18-month contracts. Hong Kong's PCCW gives away laptops to those who get on its broadband plan.

IDA is of the view that consumers may at first be enticed by these freebies, but may later feel 'unfairly locked in' by the high penalties of switching operators.

IDA hopes a balance can be struck between length of contract and penalties, so consumers can switch operators and enjoy the benefits of competition.

Read the full story in Saturday's edition of The Straits Times.