Monqi 'smartphone for kids' arriving in UK in October

1m SIM Only deals killing off contracts with cheapness

SIM Only deals far outshone sales of mobile phones bundled with long contracts to become the best performing sector of the UK mobile phone market in the last few months of 2017.

The latest data from researchers GfK shows how SIM Only – whether on short-term 30-day rolling packages or traditional 12 month contracts shot up by 20% from summer 2017 to the winter period.

The total mobile market was up by almost 900,000 units on the previous quarter, with contract SIM Only (SIMO) accounting for almost half of this increase.

The main reasons people switch to SIMO

  • Perception of better value for money
  • Faster data connections
  • More likely to have some semblance of customer service
  • Switching to take mobile services from same provider that offers them broadband and pay TV

GfK Director of Technology, Imran Choudhary, says that once people go SIMO, there’s no going back to expensive contracts.

SIM Only contracts are specifically designed to offer customers value for money. Once they switch to Contract SIMO, a sizeable portion tend to remain with this type of contract for their next purchase. In fact, of all Contract SIMO acquisitions this quarter, 44% came from an existing SIMO tariff.

Even when consumers are ready to buy a new handset, many will buy a SIM-free device. This suggests customers are beginning to de-couple the handset purchase from the tariff purchase and choosing to buy both separately.

- Imran Choudhary: Director of Technology, GfK

What this means

SIM Only is now the largest category in the mobile phone market in terms of sales. Cheap deals that work by not locking yourself into a flagship phone and a big bill make up 29% of the whole market and could kill off contracts altogether if stats continue this way.

What this means for you

As more companies pile into selling phone-free SIM deals, it should mean more competition for your hard-earned cash, even at the budget end.

Three and Vodafone’s launch of their two rival “youth oriented” SIMO brands Smarty and Voxi is a perfect example.

A basic SIM offering 500MB of data per month is now around the £3.50 a month mark.

That’s enough to get through reading an hour of headlines on BBC News but will never cut it for streaming video, let alone in max-res 4K.

Expect that minimum data limit to go up to 1GB a month for the same price by the end of 2018.

While data is expensive for mobile networks to hand out – far more so than calls or texts – it’s also the main driver for new buyers and the first thing people search for.

There’s also the small matter of the popularity of mobile 4G in filling the connection gap where home broadband is spotty or slow.

By:

Tom is a tech journalist and Editor at SimOnlyDeals.co.uk.
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