6/19/2008 3:37:00 PM
Sim-only cannibalising contracts with handsets
Mobile phone sales are being hit by the rumbling fears of a recession in the UK economy, with a conspicuous lack of demand for high-end handsets.
Senior industry figures have said that Sim-only deals (up to 20,000 per week) are cannibalising contracts with handsets, and more people are looking at cheap deals.
It comes amid increasing cases of stores not even selling one contract per day.
Decreasing household budgets and the boom in cheaper, sub-£30 phones are evident in the lack of demand for high-end handsets.
The UK rate of inflation has reached its highest level since 1997 this week, and the Bank of England Governor, Mervyn King, predicted it will exceed 4% later this year.
T-Mobile has been the most active to respond by increasing its cheap deals, including a £30-per-month Sim-only deal.