HomeFinancial/RegulationMobile brands had their price elasticity snapped by inflation - study

    Mobile brands had their price elasticity snapped by inflation – study


    Dark times ahead if sun sets on mobile operators

    Inflation has made mobile users much more price sensitive and likely to switch suppliers to save money, says research by mobile virtual network operator (MVNO) Lyca Mobile.

    It asked Censuswide to quiz 1,012 UK mobile users from the UK’s big four mobile network operators (MNOs), Vodafone, O2, EE, and Three for their opinions on loyalty. The cost of living crisis has made 65% of them reconsider their phone contract and 58% would switch to MVNOs, said the survey for the MVNO. Consumers want to cut costs where they can, so 73% are thinking about switching providers to get better value elsewhere.

    Perhaps surprisingly 64% of mobile users still feel a sense of loyalty to their MNO but that may change as 41% of contract customers think they are overpaying on their current tariff. There are no comparison figures on how loyalty is valued year on year. Half (48%) of contract customers would actively seek a new mobile provider and 35% say they only stay with their current mobile provider because it’s too much hassle to switch.

    Are MNOs taking their customers for granted? A large minority, 38%, of the contract customers had been with their current mobile provider for over 5 years and 41% felt that signing up to a mobile contract for longer than 12 months would make them feel trapped. This, argued Lyca, highlights discontent with their current provider and the typical big four MNO plan.

    Consumers are asking themselves one question, ‘Is this service giving me the best value of money?’, according to Lyca Mobile chairman, Allirajah Subaskaran. 

    Adversity is shaking up the mobile services market, according to Subaskaran, who senses the “beginning [of] a move away from the big four to alternative providers that offer low value deals to suit changing consumer needs.”

    With loyalty wilting Lyca Mobile aims to capitalise by giving customers “one less thing to worry about during these difficult times”, said Subaskaran. 

    Lyca Mobile operates in 23 countries across five continents, including the UK, USA and large parts of Europe. It claims to be the world’s largest MVNO and market leader in the international prepaid mobile calls market, with 16 million customers worldwide and a new one joining every two seconds.

    It was awarded ‘Best MVNO’ in 2022 by consumer mag What Mobile and named the 4th best MVNO worldwide by Mobile Magazine.