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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 that telcos will consider whether or not to continue with their practice of offering free gifts such as laptops and LCD television sets at the signing of contracts under 24 months long.
The agency 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 here 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: IDA suggests 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 than one with a year left.
Telcos here currently levy between $300 and $800 in early-termination charges pegged to the length of the plan picked when the cellphone was bought. 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 whether or not to continue with their practice of offering free gifts for contracts of under 24 months.
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.
The 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.
The agency hopes that a balance can be struck between length of contract and penalties, so consumers can switch operators and enjoy the benefits of competition.
These guidelines exclude corporate plans, since companies' deals with telcos are usually customised, said the paper.
Industry players pointed out that if these changes go through, telcos may slash the subsidies given on buying cellphones; early adoption of technology may also slow in the long run.
Mr Nitin Bhat, a senior vice-president of information and communication technologies at research firm Frost & Sullivan, said: 'Many Singaporeans look at such contracts or free gifts as opportunities to get the latest expensive gadgets more cheaply or even for free.'
He added, however, that the recommendation on early termination charges was the most feasible to implement.
Neither SingTel nor M1 commented on the IDA paper; both said they were still reviewing its recommendations.
Engineer Andrew Tan, 38, got a free laptop for signing up for a 36-month Singnet broadband contract, but hopes for shorter contracts.
'I save more money in the long run. Prices of plans are constantly falling. When I finish my current contract, I can quickly move on to a new, cheaper contract,' he said.
Accounts assistant Eunice Chua, 31, said: 'Big-ticket freebies like laptops are hard to resist, but long contracts tie me down and I can't sign up for new things.'
IDA's paper can be viewed at http://www.ida.gov.sg/Policies%20and%20Regulation/20080622135627.aspx. Send in your views by post and e-mail by Jan 13.
