Mobile Phone Payment Options
The mobile market has become segmented into three distinct customer types, contract mobile phone customers, pay as you go customers, and most recently sim only contract mobile users.
The first sector are the foundation for mobile phone companies, contract mobile phone customers. Until the last year or two, mobile phones were usually sold on 12 month contracts, with the benefit for customers being that they got a free handset upon agreeing to a contract. Popular since the mid 90s, the annual contract is still a common choice today, although eighteen month and two year contract choices are gaining popularity all the time. The reasons for this are primarily twofold, firstly handsets seem to last longer these days, particularly in terms of battery life time. It used to be true that by the end of your year long contract, your phone might not even hold its charge for a full day, or in some cases you might have needed to buy a replacement battery before your contract finished! The second reason for the growth of the eighteen month and two year contracts is the free gifts. By agreeing to a longer term contract, you can expect to receive a free laptop or games console on some deals, in addition to your free minutes and text allowance. Even if you don’t go for a free gift option, you will normally find the minutes and texts bundled with your handset are much more generous compared to the monthly price of a traditional 12 month option.
The second user group is the other end of the spectrum – no minimum term contract and minutes and messages are paid for as required, usually in denominations of £5, £10 or twenty pounds. The obvious target customer for this model is the under 18 market – unable to apply for credit and therefore unable to access the contract pay monthly mobile phones unless an adult signs up for them. Interestingly, the over 18’s make up for the majority of the prepay market – demonstrating the appeal of the prepay offering against the cheaper per minute and per text contract.
Lastly, the most recent arrival to the market is the Sim only deal – a contract which usually lasts only 30 days, and then renews month to month. It is mainly targetted at the part of the market with existing phones that arent bothered about getting the latest and greatest mobile phone, instead looking for the most cost effective service. This marks a clear shift in the marketplace to great value in service provision, whereas a lot of marketing spend has historically been aimed at the latest mobiles and the most advanced features.
Sim only deals.