Argos has leapfrogged Carphone Warehouse to become the number one prepay retailer, ahead of what is shaping up to be a record December for the pay-as-you-go market.
The retailer has taken the biggest share of the market for the last five weeks, registering a long enough period for many in the industry to consider it to be more than just a blip.
Argos is leading the charge of the non-specialist retailers, along with the likes of Woolworths, Tesco and even Littlewoods, which have collectively pushed past 40% market share.
It is estimated by market research firm GfK that a record 700,000 prepay handsets will be sold in the final seven days before Christmas, with the possibility of the total figure hitting one million if the contract market also booms. It is estimated that 3.5 million handsets will be sold in December.
The prepay market has been heating up considerably since the start of October, with Orange in particular pouring large amounts of subsidy into prepay deals.
Critics said the rich deals reflect the desperation of operators to show an increase on last year’s numbers.
‘The market has been dead this year. Some operators have really struggled on contract and they need to show shareholders they’re not going backwards,’ said one senior retail source.
Other networks have also joined in the prepay surge in recent weeks, with aggressive prices across almost all the networks.
‘The prepay market is up 30% from last year. The majority of that extra growth is below £30,’ said Aaron Rattue from GfK.
There are widespread fears that the huge appetite for prepay customers will make box breakers the real winners, who will take advantage of the rich deals in stores to sell phones on the open market.
GfK has asked us to point out that it did not provide data or grounds for the story, as this would break its contractual covenants. We are happy to make this clear.