Expensive handsets drive growth in shorter mobile deals

SMARTPHONE buyers shied away from two-year mobile phone contracts in favour of 12-month deals for the first time last year, data from the UK’S communications regulator shows.

Over half of all contracts in 2017 were short term: 38.3pc of smartphone contracts were 12 months, while 12pc were one month or less.

The change was due to the increase in the price of handsets, which resulted in a surge in the number of people who entered into sim-only deals and kept their old handsets for longer, Ofcom said in its annual communications report. The number of short-term mobile phone contracts increased by 21 percentage points from 2012, when they represented 29.2pc of the market.

Overall, mobile retail service revenues dropped by 2.5pc to £15.4bn in 2017, as users increased the data and messaging allowances within their smartphone contracts.

Ofcom said that the demand for payas-you-go services dropped by 6.4pc last year from 29.5m to 27.6m, as more people opted for contract services.