Carphone Warehouse has reported that they believe that the UK pre-pay or pay as you go (PAYG) mobile phone market has dived by between 35% and 40% in the final three months of 2011. But is this really true or just a reflection of the changing ways in which people are buying their pay as you go phones?
It’s much more likely that the market for pre paid phones is holding up strongly – we had very good sales in the run up to Christmas. The difference is that the pre-paid market is changing. Users of pay as you go phones are much more interested in the flexibility of not being confined to one network provider. Dual SIM and factory unlocked phones are very popular in this marketplace.
The High Street and main retailers in the UK do not meet the demands of this market place adequately – you try and find a multi-SIM smartphone on the High Street. They a few and far between so the customers of the pre-paid market are moving online and getting high quality Android phones that are truly flexible.
Carphone Warehouse are saying the slump in demand for pay as you go phones has been caused by a lack of network subsidies for this type of contract-free market and also a lack of variety in choice.
I don’r see the lack of network subsidies being the cause of this slump in demand at the company. The up-front cost of purchasing a factory unlocked phone is important but is not the deciding factor when someone buys a PAYG mobile. This market is driven by choice, flexibility and freedom.
The bulk of the market for PAYG phones is made up of people who want to run more than one SIM card from their phones and a locked phone is no good to them whether it’s subsidised or not.
The biggest reason for the fall in sales on the high Street or with the top companies is their inability to provide a wide range of quality factory unlocked phones. This means that these customers are buying on-line at mobile phones shops that can provide them with their needs.
Here at Phonelingo we can offer totally unlocked smartphone that can in many cases match the style and functions of the leading brands but at a fraction of the cost. From what I hear from our customers it’s not so much the discount prices on android smartphones that are attractive to them but the ability to run multiple SIM cards from the same phone and to be able to connect up to public wifi for fast internet access.
It’s not hard to see why the brand retailers or losing out to online smartphone retailers. Why spend £60 or £70 on a locked single network phone which is not a full android smartphone in a high Street shop or at a mobile store in a shopping mall when you can go online and buy a fully functional android smartphone for the same price – and have the ability to run 2 networks and wifi at the same time? It’s a bit of a no brainer really.
Expect to see further declines in pre-paid phone sales as more people realise the benefits and the quality of phones that can be bought direct from the factory agents in China and self-import their own smartphones.
