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With inflation raging and the cost-of-living crisis continuing to bite throughout the UK, the telecommunications industry is beginning to get buffeted by the same economic headwinds as other sectors, resulting in a growing trend for companies and consumers to consider switching mobile providers to help ease the pressure, according to research by Lyca Mobile.
The study, undertaken by Censuswide on behalf of the company that claims to be the world’s largest mobile virtual network operator (MVNO), surveyed 1,012 UK mobile users between 19 May and 1 June 2022.
Worryingly, just under two-thirds of contract customers (65%) of the big four mobile network operators in the UK – Vodafone, O2, EE, and Three – stated that the current cost-of-living crisis had made them reconsider their phone contracts. With consumers looking to bring down costs where they can, 73% of UK mobile users who were thinking about switching providers this year stated that getting better value elsewhere was their main motivation.
Another key finding was that the cost-of-living crisis was shaking mobile network operator (MNO) loyalty. While almost two-thirds of contract customers (64%) said they felt a sense of loyalty to their mobile provider, the current squeeze on household finances could be set to change that as two in five (41%) contract customers believed they were overpaying for their current tariff.
The survey found that in the interest of lowering costs alone, just under half of contract customers (48%) would actively seek a new mobile provider. With over a third (35%) saying they only stayed with their current mobile provider because they considered it a hassle to switch, MNO loyalty could diminish as prices continue to soar across the country and consumers seek ways to save money.
But even as the cost-of-living crisis continues to hit the UK, causing consumers to become more deal-conscious, the survey noted a growth opportunity for MVNOs. It revealed that the current economic climate meant many customers were re-evaluating their loyalty to the big four MNOs, with almost six in 10 (58%) planning to switch to alternative providers such as MVNOs, creating a major market opportunity for smaller providers.
Despite 38% of contract customers revealing that on average they have been with their current mobile provider for over five years, 41% felt signing up to a mobile contract for longer than 12 months would make them feel trapped – highlighting discontent with their current provider and what is a typical big four MNO plan.
“As households across the UK continue to be squeezed by rising bills and price hikes, consumers are increasingly frustrated and unafraid to ask the all-important question: Is this service giving me the best value of money?” said Lyca Mobile chairman, Allirajah Subaskaran.
“This is shaking up the mobile services market and beginning a move away from the big four to alternative providers that offer low-value deals to suit changing consumer needs. We know how important it is to be able to connect with family and friends – wherever you are, easily and accessibly. Everyone should be able to stay connected [and the company strives to give] great value offers that give customers one less thing to worry about during these difficult times.”