Pay As You Go pays off

The landscape of the mobile phone market is set to alter dramatically in coming months as 6.5 million users consider switching from a mobile phone contract to a Pay As You Go (PAYG) option because of the economic climate.

A further three quarters of a million people (723,000) say they are already in the process of switching, according to a report out today from Post Office Telecoms.

There are already more than 32.7 million PAYG users in the UK, making up 54 per cent of the population, and this recent study indicated it could increase to a possible market share of around 65 per cent.

In recent months some Post Office branches have seen an increase in sales of mobile top ups of over 100 per cent and, as the UK’s second largest provider of the service, the network is bracing itself for a sharp increase in sales during 2009.

Martin Moran, Post Office head of telecoms, 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.

“The Post Office also offers customers the option to pay many bills in cash, including our HomePhone and broadband services, which can help them control their spending in an easy and transparent way. We’re preparing ourselves for an increase in use of these services as the financial crisis deepens.”

According to one in five people PAYG is a good option if you have a bad credit rating, with 31 per cent of under-25s citing this as a reason to use PAYG. The under-25s were also the wariest about signing a monthly contract (67 per cent).

Regionally, mobile phone users in the South West were the most likely to switch from contracts to PAYG (40 per cent).

The top reasons for topping up rather than signing up to a contract were:
1. You only pay for what you use (69 per cent)
2. You have more control over you spending and won’t be saddled with bills you can’t afford (59.2 per cent)
3. You don’t feel the pressure of being tied into a contract (58 per cent)
4. You don’t need a good credit rating (21 per cent)
5. They are simpler to understand (15 per cent)

To find out more about Post Office E Top-Ups and the Post Office’s other telecoms services, which include HomePhone, Broadband, directory enquiries and International Phonecards, visit postoffice.co.uk