- Nearly three-quarters of people plan to act if their mobile or broadband bill goes up this year
- Financial constraints push some to take out mobile contracts over a longer term
- Phone replacement cycles are set to lengthen further, but there’s hope for foldables
- Sales of refurbished devices grow as people seek savings
- SIM-only contracts continue to rise
London, 25 January 2024: The ongoing squeeze on household budgets is creating new dynamics in the UK telecom market. This is the main finding of CCS Insight’s sixth annual survey into people’s buying behaviour for mobile and broadband products and services.
Nearly three-quarters of people would be prepared to act if their mobile or broadband bill goes up this year. A significant 15% told us they would respond to any increase, and more than half would consider doing so, depending on how much more they are asked to pay. Less than a fifth said they’d do nothing.
Our survey was carried out ahead of last week’s news that the price of many mobile service plans would jump by 7.9% in a few months’ time. Although this isn’t as much as last year’s double-digit hikes, it’ll still be a large increase for many. Among those affected by a price rise in 2023, 15% told us they negotiated a better deal and 5% changed provider altogether.
Kester Mann, Director of Consumer and Connectivity at CCS Insight, says that operators need to tread carefully. “Our research shows that cost-of-living concerns are pushing people to review their telecom contracts”, he commented. “Another round of price rises won’t land well, and many people seem ready to do something about it”.
Another upshot of the tricky financial environment is growing demand to spread payments over longer terms, with the survey showing a jump in mobile phone contracts lasting more than 24 months. Last week, O2 became the first UK operator to offer 48-month contracts, suggesting this trend is set to continue.
The survey results also show that Apple and Samsung continue to tighten their stranglehold on the UK mobile phone market. Eight in 10 people who knew which brand of mobile phone they own said that their primary personal device is one of these two brands — that’s up from 66% in our 2019 survey.
Concerningly for aspiring rivals, brand loyalty is also highest at Apple and Samsung. Nearly eight in 10 iPhone owners expect to stay with Apple when they buy their next mobile phone; for Samsung customers, it’s 67%. But loyalty plummets among owners of other brands, at just 33%.
Mobile phone replacement cycles, which we now estimate at slightly over four years, will continue to lengthen, according to the survey. When we asked people how long they expect to own their current mobile phone compared with their previous, more than three times as many responded “longer” than those who said “shorter”.
As demand for devices dips, SIM-only contracts continue to grow: 42% of people now take this type of plan, up from 35% in 2019. Among these customers, the vast majority expect to remain on SIM-only over the next two years.
But it’s not all doom and gloom for devices — our survey offers encouraging signs for the fledgling category of foldable smartphones. Nearly half of people said that owning one would be appealing and 53% have seen a foldable phone in real life, up from 41% a year ago. Their compact design and display size were highlighted as among the most attractive features.
Our research also brings much-needed positive news to the embattled UK high street as the proportion of phones sold in shops nudged up slightly from the prior survey. Mann commented: “This could be because people who were forced to buy online during Covid-19 lockdowns became ready to upgrade and decided to return to a physical store”. But he added: “Most people still buy their phone online. And with brand loyalty so high, the convenience of taking another model from the same brand at the mere click of a button still holds sway”.
Financial and environmental concerns continue to drive the burgeoning market for refurbished devices, which now represent almost one in 10 mobile phones in use in the UK, up from just 4% five years ago, according to the research. Fuelling this market is device trade-in, and the survey reveals strong willingness to use this option next time people buy.
Finally, attractive pricing represents the main opportunity to kick-start the market for converged services. Although this has flatlined recently, about two-thirds of people currently using a different provider for their mobile and home broadband service would be encouraged to sign up with the same provider if it offered attractive discounts.
Although the year ahead looks challenging, changing consumer purchasing behaviours as identified in our survey also bring opportunities to companies that best respond to these new trends.
Notes to Editors
The research was conducted in December 2023. CCS Insight surveyed 1,002 mobile phone users in the UK 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 focused on areas including responses to the cost-of-living crisis and annual price rises, the trend to online activities, where and how people buy mobile phones, interest in and awareness of foldable smartphones, attitudes toward converged services, how people interact with operators, the accessories market, airtime purchases, perceptions of second-hand and refurbished devices, and considerations for 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/
About CCS Insight
CCS Insight is a global analyst company focusing 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 X or learn more at www.ccsinsight.com.
For further information contact:
Aylin Karanis
Harvard PR
Tel: + 44 (0) 7385023639
E-mail: ccsinsight@harvard.co.uk