One in three contract consumers in the UK will be SIM-only by end of 2017, says CCS Insight

In its recently published latest operator forecast report, market research firm CCS Insight says that more than one third of contract consumers (34%) will be on a SIM-only deal by the end of 2017 in the UK. This represents solid growth compared with 27% at the start of 2017 for a concept that is still relatively new for the consumers in the country who are still habituated to buying a subsidised two-year handset deal.

Over the coming years, SIM-only penetration is said to rise steadily and will account for the majority (54%) of all consumer contracts by 2021. The main drivers of growth will be multiplay bundles of telecom services, family plans for mobile subscriptions, growth of second-hand device sales and a still largely lacklustre smartphone market. This growth could accelerate further should handset manufacturers become more assertive in their positioning of direct-to-consumer instalment programmes.

Besides, if the UK starts offering heavily discounted converged offers like France and Spain, then the growth of SIM-only contracts will accelerate rapidly, the analyst firm adds. Spain in particular has almost fully transitioned to the SIM-only approach, and Orange reports that 99% of consumer voice contracts were on such a deal in the last quarter of 2016. Moreover, if providers seek to flood the market with low-cost or even free SIM cards, growth of SIM-only contracts will become significant.

According to the report, the MVNO landscape has a scope of grow in the country and is said to be the most vibrant and competitive market in Europe. Virtual providers represented 14% of all mobile customers at the end of 2016 and will play an important role in taking total subscriptions toward 87 million by 2021.

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