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Ofcom research shows cost of mobile services is falling

Jasper Hart
January 15, 2020

UK prices favourable to European countries, says regulator

The average price of monthly mobile contracts has fallen by nearly £2 since 2018, according to new research from Ofcom.

The telecoms regulator’s annual Pricing Trends report claims that UK mobile customers pay less than those in France, Germany, Italy, Spain and the US.

Since 2016, the price of the average mobile contract has gone down by 19 per cent, while data use has increased by 146 per cent. Ofcom calculated the price of a mobile service (based on the mean average mobile use of 168 minutes and 3.2GB a month) was £13 a month, nearly £2 lower than in 2018 (based on 2018 average mobile use of 169 minutes and 2.5GB per month).

However, Ofcom stated that many consumers may still be paying for more data than they need, with a study of 150,000 Android users revealing that only 10 per cent used more than 5GB per month, despite more than 70 per cent of mobile tariffs offering more than 5GB of data.

SIM-only deals and refurbished handsets continued to gain popularity, with the former accounting for 38 per cent of subscriptions, an increase on 34 per cent in 2018. Ofcom also claimed that buying a SIM-only contract and a handset separately typically meant a lower cost.

“Bundled contracts were equivalent to the customer being charged an APR (annual percentage rate) of 13-24 per cent for their handset. The additional cost can be much higher if customers do not move onto a SIM-only deal at the end of their contract,” the report stated. Ofcom claims that nearly 1.5 million out-of-contract people could save on average £11 per month if they switched to a SIM-only deal.

Ofcom also noted the emergence of unlimited data tariffs with differing speed tiers, and data plans that do not deduct monthly data when using certain social media and streaming apps.

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