UK survey shows move away from device subsidy model

UK survey shows move away from device subsidy model

18 AUG 2015

The proportion of UK smartphone owners on SIM-only deals leapt threefold since 2010, according to research firm YouGov.

Its survey found that 16 per cent of smartphone owners had SIM-only deals in the second quarter of 2015, up from just five per cent in 2010.

Bearing the brunt of SIM-only’s rise is the contract model, which has fallen from 80 per cent to 67 per cent over the same period.  The rise in SIM-only is also a move away from an operator’s traditional model of subsidising the upfront cost of devices.

Meanwhile, prepaid held its own with a three point increase from 13 per cent to 16 per cent over the past five years.

Also striking about the survey is how much longer users hang onto their smartphones compared to a five year ago period. In 2010, 38 per cent had owned their device for less than six months, a figure that has dropped to 28 per cent today. Meanwhile, the proportion of users hanging onto their devices for 6-12 months rose from 19 per cent to 26 per cent.

Bucking the trend, the proportion of consumers who had owned their smartphone from 12-18 months has decreased from 29 per cent to 23 per cent. But the share of users who had their device for 18 months or longer has risen from 14 per cent to 23 per cent.

Russell Feldman, YouGov’s director of technology & telecoms, explained the trends in the survey: “The decrease in the levels of smartphone contracts has come as people hold on to their devices for longer. There is a perceived lack of innovation in the market because smartphones aren’t the new kid on the block anymore.”

This means users may now be on their third iteration of smartphone and enthusiasm has dulled somewhat: they do not see as many “killer” features as they did when they first got the devices.

“As phone owners hold on to their devices for longer there has been a decline in the number getting contracts and an increase in those getting SIM-only deals,” explained Feldman.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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