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Economical mobile phone contracts find favour with cash-strapped consumers

Pay as you go mobile phone deals are becoming less and less popular, as attractive contracts and Sim-only deals entice more and more cash-strapped consumers.

New figures from three of the UK’s largest mobile phone networks, Virgin Mobile, T-Mobile and O2 bore out the fall in pay as you go business in the face of the credit crunch.

Virgin Mobile reported that it had shed 224,000 prepay customers, but gained 70,800 contract customers.

Meanwhile, T-Mobile revealed that its contract customer rose by 4.5 per cent during the last quarter of 2007, while its pre-pay numbers fell by 5.2 per cent.

The rise of sim-only deals is evident from the fact that these now account for between 30 per cent and 35 per cent of all contracts being signed.

Strategy Analytics’ director of global wireless practice, Phil Kendall, told Mobile Today that the results were symptomatic of the change in consumer habits inspired by the economic downturn.

He explained: “The Sim-only dynamic holds more value for high spending prepay users – the beauty of Sim-only is that acquisition costs are low.”

‘The mobile phone is still top of the list, although people are holding onto phones for longer. Sim-only fuels those who might not want to upgrade for fear of getting into a new contract.’

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