SIM Only contracts rise by 400%

SIM Only contracts rise by 400%

2013 is set to be an exciting year in the world of smartphones. With the release of new models including the Samsung Galaxy S4, the HTC One, and soon the new iPhone 5S or iPhone 6, this year could be a tight-fought battle between the big dogs in the mobile phone industry.

But looking at the sales figures collated from various online retailers including Carphone Warehouse, Phones4u, e2save and Mobiles.co.uk, it is perhaps surprising to learn that SIM Only contracts were one of the top 5 best-selling contracts of the last 8 months.

SIM Only contracts are often not considered by users, who instead prefer to purchase mobile phone deals which include a free smartphone, whether for simplicity or just because this seems the most obvious route to finding the best mobile phone deals.

However, it seems that between August 2012 and April 2013, SIM Only contracts have risen steadily, becoming more and more popular as the year progresses. In fact, SIM Only contracts increased by 416% between these months, particularly from November 2012 onwards.

But what can be behind the growing trend in SIM Only contracts?

Mobilephones.com’s expert, Michael Brown, states “With the current economic climate as it is, more and more people are choosing to keep hold of their existing phones and are simply buying a SIM Only contract which offers all the minutes, texts and data they want, but at half the price.”

And with SIM Only deals starting from just £2.25 per month, you really can get yourself a bargain mobile phone contract which focuses more on your individual phone usage, rather than the handset itself.

And while many users appear to be holding onto their old mobile phone handsets instead of upgrading, others are deciding to get both the best mobile phone package that suits their individual needs, at the same time as owning the latest model on the market.

However, the cost of, say, a free Samsung Galaxy S3 on a T-Mobile contract with unlimited texts, 300 minutes and 1GB of data will set you back £26 a month, totalling £312 a year. On the other hand, buying a SIM Only contract offering the same package and a Samsung Galaxy S3 handset will total £513 a year. The case is the same for the iPhone 5, which actually emerges more than £100 more expensive to buy the contract and handset separately.

This suggests, then, that users are in fact holding onto their old handsets in order to save a few pennies. Perhaps this says as much about the handsets themselves as it does about the people buying them; “Upgrading from an iPhone 2G to a 3GS, or from a Samsung Tocco to a Galaxy S2,” Darren Ithell, a spokesperson for Mobiles4everyone states, “might have been more dramatic than moving from an S3 to and S4, or from an iPhone 4S to and iPhone 5.” As a result, people are failing to see the advantages in upgrading, and thus paying more money, for the newest models on the market.

Could this change the way that new releases are selling? If more people are choosing to keep their existing phones, it would suggest that we will continue to see an increase in SIM Only contracts correlating with a slower rise in sales for the latest models, such as the Samsung Galaxy S3 or iPhone 5S, which offer very little in the way of change from previous models.

If a manufacturer pulls a cracker out of the bag, offering the user a multitude of new features, functions and programmes- as with the HTC One, for example- we might be more likely to see the device flying off the shelves of UK retailers. In the meantime, however, with new devices including only minor or insignificant alterations, we are sure to see SIM Only contracts continue to rise regardless of the economic climate.

Written by Charlotte Kertrestel

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