CCS Insight: SIM-only plans gain momentum in the UK

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SIM-only contracts account for 27 per cent of the market, which is predicted to hit 37 per cent at the end of the year

More than a third of contract subscribers in the UK will be on SIM-only deals by the end of 2017.

This is according to analyst firm CCS Insight who claim the UK will rise to 34 per cent SIM-only adoption by the end of the year. SIM-only deals accounted for 27 per cent at the start of this year.

CCS predicts SIM-only will continue to penetrate the UK market to eventually become the majority of all consumer contracts by 2021, at 54 per cent. Driving SIM-only subscriptions will be multi-play bundles of telecom services, family plans for mobile subscriptions, rise of secondhand devices and a lacklustre smartphone market.

Manufacturers can accelerate the growth by asserting their position to direct-to-consumer instalment programmes. Apple and Samsung offer monthly payments for its devices, the Korean manufacturer launched its monthly scheme a year ago ahead of Apple. Due to the dominance of both firms in the UK, the giants could affect the growth rate if it expanded upon its respective programmes.

Other markets such as Spain and France, could follow in offering converged offers to also accelerate SIM-only contracts rapidly. Spain has almost transitioned fully to the approach, Orange reports 99 per cent of consumer voice contracts on such deals in Q4 of 2016.

Significant growth will arise if providers flood the market with low-cost apr even free SIM cards. TalkTalk already adopted this strategy to attract and retain customers to its broadband and TV services.

Rise of the MVNO

Sky has more potential to assertively exploit cross-selling opportunities; it estimates 23 million active monthly mobile subscribers in Sky homes – a huge potential for the quad-player.

CCS Insight reports strong growth in the MVNO landscape, “probably the most competitive market in the Europe”. MVNO providers represent 14 per cent of all mobile customers at the end of 2016 and will play an important role taking total subscriptions to 87 million by 2021.

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