Phone users are ditching contracts for cheap SIM Only deals to get more value for money in the face of rising bills, industry research shows.
The Bank of England has indicated interest rates will rise this year in the face of a weak pound and plummeting consumer confidence, tied by researchers to Brexit.
And mobile users are shifting their allegience away from constant handset upgrades in the face of higher household bills, with luxury items first for the chop.
Industry analyst Marion ter Welle said that the uncertainty over Brexit was hitting the biggest companies and trickling down to high street and online sales.
In addition to the slowdown in the smartphone market, we expect mobile operators are suffering from the economic uncertainty surrounding Brexit.
With inflation approaching 3% and consumer confidence in negative territory, mobile customers are likely to be reflecting harder on the costs of their mobile plan and/or handset.”- Marion ter Welle: Telecompaper.com
EE has the biggest 4G share of any mobile network and together with owners BT added over 210,000 SIM Only customers in the last quarter.
BT said in the latest quarterly earning reports the number of phone contracts sold across its networks dropped by 385,000 “in line with industry trends”.
Vodafone too pointed to a slowdown in contracts saying handsets were cutting profits compared to SIM Only.
SIM Only savings are not to be sniffed at, as our own team at SIMOnlydeals.co.uk has found.
I was on a really expensive contract with EE for about seven years and never really bothered looking at what it cost me.
I got my first smartphone through an EE contract, a Samsung Galaxy S5, and it’s still good enough for 4G internet and mobile games, so I kept the phone, dropped the contract and switched to a £10 4GB Plusnet SIM deal. I don’t have to change networks because Plusnet uses EE anyway, and it’s saving me £18 a month.- Tom Rodgers: Editor, SIMOnlydeals.co.uk
In agreement with the trend away from contracts iD Mobile’s owner Carphone Warehouse
issued a profit warning last month, saying consumers were holding onto their mobile phones longer as technology upgrades become less frequent and the weak pound makes handsets more expensive.
So while Samsung and Apple are relying on just a couple of blockbuster flagship models to shore up company profits, mobile networks and the public at large are looking elsewhere.