New research from the Post Office has found that a quarter of mobile phone owners are considering ditching their contracts in favour of Pay As You Go.

The mobile phone market is likely to look dramatically different in coming months as 6.5 million users consider switching from a mobile phone contract to a Pay As You Go (PAYG) option due to the current economic climate. A further 723,000 people say they are already in the process of switching to a pre-pay tariff.

Currently 32.7 million people in the UK are on PAYG - 54% of the population. But this figure is likely to rise to around 40 million, equivalent to a 65% market share.

Some Post Office branches have seen sales of mobile top-ups more than double in recent months, suggesting that sales will continue to go up sharply in 2009. Martin Moran, head of telecoms at the Post Office, said, “Clearly people are being mindful of their finances during difficult times, and taking control of their spending by switching to more manageable options for mobile phone costs.

“59 per cent of people say that having a PAYG mobile allows better control of spending and in some Post Office branches we’re seeing record numbers of people topping up their mobile phone at the counter,” he added. “We’re preparing ourselves for an increase in use of [such] services as the financial crisis deepens.”

Reasons that customers gave for switching to PAYG included better control of spending, since you pay only for what you use, and use only what you can afford; none of the pressure of committing to a contract, and the fact that you don’t need a good credit rating to top up.

Regionally, mobile phone users from the South West were most likely to switch to PAYG. Under 25s were wariest about committing to a contract, with 31% citing a bad credit rating as a reason to use pay as you go.

This entry was posted on Thursday, February 26th, 2009 at 3:47 pm and is filed under Budgeting, Money Saving Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.