The UK’s major mobile networks are starting to sweat as more people realize the benefits of going SIM Only.
According to a recent report from market research firm YouGov, the Big Four mobile networks EE, O2, Three and Vodafone are losing more switchers than they are gaining.
Of those who switched provider in the past 12 months, 66% left one of the Big Four to join a cheaper or better data deal with an MVNO (Mobile Virtual Network Operator) instead.
Unlike the Big Four, MVNOs do not own or manage any of the mobile infrastructure themselves. They instead piggyback data and call signal from one of the major networks, delivering their services to customers as a sort of 4G middle-man.
Over 55% of switchers joined an MVNO in 2017 and, with only 32% of customers leaving, this led to an overall increase of 23% for the market share of MVNOs like Sky Mobile, BT and Giffgaff.
Although only 12% of customers changed network in the past 12 months, switching has led to total savings of over £9.5 million. This just goes to show the immense saving power that switching contracts gives to customers.
Unfortunately, it also demonstrates just how many people are being cheated out of their money by the ‘loyalty fees’ imposed by the networks.
The biggest switchers are those moving to SIM Only deals. Keeping the phone you’ve already paid for and switching to SIM Only means big savings, as handset-inclusive contracts keep charging you for a device even after you’ve paid it off.
This is an especially popular move for pricey iPhone owners, who often switch out of their inflated contracts to benefit from SIM Only deals instead.
Our research suggests that many customers are holding on to their handsets when their contract ends then make the move to SIM Only deals, rather than choose to upgrade to a potentially more expensive deal and get a new device.- Russell Feldman: Director of Digital, Media and Technology, YouGov
The Big Four networks have had a monopoly on the mobile market for years, but the steady growth of MVNOs is starting to change all that.
O2 has its popular 30-day contract specialists Giffgaff.
All of these launches are recognition of the trend that people just now prefer to move away from the monolithic companies they’re used to dealing with.
As competition increases, customers who actively switch providers continue to benefit from better deals and tariffs.
Quad-play providers (offering combined TV, broadband, landline, and mobile packages), are set to be the biggest threat to the Big Four.
By bundling services, companies like Sky and BT can offer exclusive discounts through quad-play packages that their rival networks struggle to match.
Networks like EE and O2 might have the edge when it comes to pulling in long-term customers, but they’re going to have their work cut out for them to keep up with quad-play giants, and the tide of MVNOs, who are pulling their customers away.