- People are reviewing their mobile and broadband packages as budgets tighten
- SIM-only plans become the most popular
- Foldable smartphones offer hope to the struggling mobile device market
- Online channels now vital for buying a mobile phone and engaging with an operator
- Appetite for pre-owned phones continues to grow
London, 7 February 2023: Higher prices and increasing concerns about the cost of living are accelerating changes in how Britons buy mobile phones and airtime contracts. This was a leading finding of CCS Insight’s fifth and most comprehensive survey into mobile buying behaviour in the UK.
Kester Mann, Director of Consumer and Connectivity at CCS Insight, commented: “Our research shows that people are reviewing their telecom purchases against the backdrop of growing economic uncertainty. For example, about four in 10 people said they have either already downgraded a mobile or broadband subscription or plan to do so”.
People don’t seem to be taking annual price rises lying down either. Last April, following a surge in inflation, millions saw their telecom bills increase by a double-digit percentage. Among those affected in our survey, one in six said they negotiated a better deal with their provider, 14% opted to move to a cheaper plan and 8% ditched their operator altogether. With many plans set to surge by 14% in just a couple of months, operators should brace themselves for possible backlash.
But there’s a bright spot in this picture, as we also identified a small group of people who brought forward the purchase of a mobile phone because of the macroeconomic uncertainty. We believe they did so to pre-empt further price rises or to buy before the economy worsens.
Our survey shows that SIM-only deals have become the most popular type of mobile plan in the UK. These deals represent about 40% of our sample, overtaking for the first time the traditional contract-with-a-phone subscription preferred by 35% of respondents.
According to Mann, strained household budgets are an important factor behind the rise of SIM-only plans, but growth is being fuelled by many other reasons. “Momentum for SIM-only has been building for years, driven by many of the trends highlighted in our survey”, he said. “These include people holding onto their phones for longer, the growing popularity of trade-in schemes, higher sales of refurbished devices, the trend to online purchases and the emergence of new sales channels”.
In fact, our research suggests that growth of SIM-only contracts will continue. More than 80% of SIM-only customers expect to stay on this type of plan for a least the next two years, and about a fifth of pay-as-you-go customers plan to move to SIM-only when their financial situation improves.
The survey also reveals encouraging signs for the fledgling category of foldable smartphones. Nearly nine in 10 respondents have heard of a foldable smartphone and over four in 10 have seen one in real life. There’s clear interest to own one too, with the compactness of the device and size of display highlighted as the most attractive features.
Although there were fewer Covid-19 restrictions in 2022, the long-term growth of the online channel continued, at the expense of retail stores. More than half of survey participants (55%) told us that they bought their current mobile phone online, up from 47% in our 2018 survey. Also, more than twice as many people researched their phone online as in-store. And when we asked people how they plan to interact with their mobile operator over the next six months, three of the top four methods were digital, with visiting a store ranked fifth.
Momentum for the pre-owned market shows little let-up. Almost half of people have now sold or part-exchanged a used mobile phone in the past. The proportion of Britons using a refurbished mobile phone as their primary device has doubled since our 2018 survey, at 8%. Also, over half of people would consider taking a refurbished phone next time, including 65% between the age of 16 and 24, with the leading motivation being attractive pricing.
With 2023 shaping up to be a tough year, many of the trends identified in the survey are set to accelerate their effect on how people buy mobile services and interact with their provider.
Notes to Editors
The research was conducted in December 2022. CCS Insight surveyed 1,000 UK mobile phone users aged 16 and over, representative of the population by age, gender and region. When answering questions, people were asked to consider their primary mobile phone for personal use.
The survey focussed on multiple areas, including responses to the cost-of-living crisis and annual price rises, the trend to online activities, use of trade-in and part-exchange schemes, where and how people buy mobile phones, interest and awareness of foldable smartphones, willingness to take second-hand and refurbished devices, views on e-SIM and attitudes to device repair.
More details of CCS Insight’s extensive research into mobile network operators and mobile phones can be found at: https://www.ccsinsight.com/research-areas/telecom-operators/.
About CCS Insight
CCS Insight is a global analyst company focussing on current and future trends in technology. It provides comprehensive services that are tailored to meet the needs of individual clients, helping them make sense of the connected world. Follow @CCSInsight on Twitter or learn more at www.ccsinsight.com.
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