Handset growth suggests recovery in UK mobile market, says research

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For the first time in nearly two years the mobile handsets market has posted three consecutive months of year on year growth, suggesting that the recession may finally be lifting from the UK market. This is according to new research from GfK Retail and Technology.

GfK said that April, May and June all posted positive growth, with June posting an encouraging 6.8% increase over the same period last year.  This turn-around has been mostly fuelled mostly by the ongoing success of the Contract market, which has been in decline only twice in the last year due to the continued demand for Smartphones, it says.

Despite this, the total market has seen a decline due to the large regression of the Prepay market during the same period, which until April had only seen a single period of growth during the last year.  However, a series of successful below-the-line promotional activities across the industry has pushed the Prepay market back into growth, taking the total market with it says GfK.

The future remains uncertain however, according to GfK: highly anticipated new product launches look set to continue to drive the Contract market into growth, but the Prepay market may fall back into decline without sustained promotional activity.  In addition, the looming spectre of the contract lull caused by the mass shift from 18 to 24-month tariffs in 2008 may well see the total market slip back into negative growth later in the year.