iD Mobile owner Carphone Warehouse has issued a profit warning to investors as bosses blamed Brexit for rising prices and fewer people buying the latest smartphones.
Flashy updates like fingerprint scanners and edge-to-edge screens have become common on the latest devices. But there’s less revolution and more evolution in the smartphone market so more are hanging on to their phones for longer.
The weakness of the pound against the euro in the wake of Brexit negotiations also means that handsets are relatively more expensive. And changes to EU roaming law mean iD Mobile believe their business will be less profitable this year.
The company admitted this week that it had made a mistake in charging British customers in the EU who made calls, sent texts or using the internet on iD Mobile plans. It said it would refund all of its customers by the end of August.
EU law changed on 15 June 2017 to say that all mobile customers should be able to ‘Roam Like Home’ and wouldn’t be charged extorionate fees for using their mobiles in Europe.
Over the last few months we have seen a more challenging UK postpay mobile phone market. Currency fluctuations have meant that handsets have become more expensive whilst technical innovation has been more incremental.
We have seen an increased number of people hold on to their phones for longer and while it is too early to say whether important upcoming handset launches or the natural lifecycle of phones will reverse this trend.- Seb James: Group Chief Executive, Carphone Warehouse
Bosses said in a trading update that while sales had risen elsewhere in the electrical business, “challenging conditions in the UK mobile phone market” meant profits would fall this financial quarter.
ID Mobile is a Mobile Virtual Network Operator which uses O2’s signal for calls and data.
It launched the UK’s cheapest SIM Only deal last month, offering 500MB of data, 500 minutes and 5,000 texts for £3.99 a month.