Operators' sim-only customer levels jump as prepay falls

Operators' sim-only customer levels jump as prepay falls

 

The number of prepay customers are rapidly falling, as savvy consumers take advantage of cheaper contract and Sim-only deals.

Results from T-Mobile, O2 and Virgin Mobile last week (23 February) confirmed that contract customers were increasing, while prepay is decreasing and is set for further decline in 2009.

It is understood that between 30% and 35% of contract deals currently being signed up are on Sim-only.

T-Mobile’s prepay customers were down by 5.2% on its 2007 figure to 12.7 million, while it saw a 4.5% increase in contract customers (virtually all Sim-only) to more than four million, over the same period.

Meanwhile, Virgin Mobile reported record numbers of contract customers at the expense of prepay users. During the final quarter of 2008, the MVNO ?gained 70,800 contract users, taking its total to 649,000, but it lost 224,000 prepay customers.

Virgin Mobile said it expected prepay subscribers to decline further in 2009.

O2 added both prepay and contract customers, with the most substantial increase on contract tariffs. The network ended 2008 with a total of 19.5 million customers, adding 289,690 prepay users and 798,690 contract customers in Q4.

O2’s Sim-only Simplicity tariff accounted for around one quarter of new consumer contracts and represents more than 10% of the network’s postpay consumer base.

Rival Vodafone is catching up in the UK market. It added 449,000 new UK users in Q4, taking its customer base to 19.2 million.

Orange will report results next week.

Strategy Analytics’ director of global wireless practice, Phil Kendall, said: ‘The Sim-only dynamic holds more value for high spending prepay users – the beauty of Sim-only is that acquisition costs are low.’

So far, operators, unlike manufacturers, have ended 2008 with minimal losses. Kendall added: ‘The mobile phone is still top of the list, although people are holding onto phones for longer. Sim-only fuels those who might not want to upgrade for fear of getting into a new contract.’

Written by Mobile Today
Mobile Today

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