Carphone chief Charles Dunstone pessimistic about prepay

The potential of the prepay market is the hot topic for many senior executives.
Carphone chief Charles Dunstone sounded pessimistic regarding prepay compared with contract.

He said: ‘There is a squeeze on the customer, because buying a prepay requires you to put your hand in your pocket. It’s a different buying pattern than getting a free phone for an upgrade.

‘We have to be mindful of the pressure on the consumer so we will be pricing hard in what we expect won’t be an easy environment.’

Many experts have said that the low-end prepay market would suffer, as the typical low-income customers who shop for ‘sub-£30’ phones would be the most affected by the difficulties in the economy.

Brendan Sweeney, MD of Phones 4u, was more hopeful: ‘The Christmas market is gifting, and people will still buy gifts. The value on a mobile phone is [still] exceptional compared to other consumer goods. Mobile handsets represent incredible value for £50.’

Several retailers said that T-Mobile was one of many operators looking at not subsidising heavily in the coming months.

One senior operator source added: ‘I think this is the year when operators should stay away from crazy things on prepay. But then again I was hoping for that last year.’