Rising prices are forcing consumers to be more prudent with their spending, which means they are holding onto their phones for longer.
The average age of smartphone ownership is now 2.8 years, up from 2.6 years this time last year, new data shows.
More than 30% of UK consumers have owned a smartphone for more than three years, an increase of more than a fifth.
Both EE owners BT and Virgin Media O2 have reported falling smartphone sales in recent months as consumers tighten their wallets.
Jack Hamlin, director of global consumer insights at Kantar’s Worldpanel division, which examined the data, attributed this trend to the UK’s “sticky” inflation.
“While inflation may be slowing now, a decline in household savings and an increase in credit card defaults will put further pressure on consumer wallets into 2024,” he said.
“Inflation-stricken consumers are changing their behavior accordingly. Smartphones are being used for longer periods of time and are increasingly being replaced only when they break.”
UK mobile networks (EE, Vodafone, O2 and Three) all implemented inflation-busting price hikes in April, increasing bills by up to 15% in April.
The lack of transparency around price rises has angered many consumers and prompted regulator Ofcom to intervene.
Adding to the blow, British consumers are now paying more for their devices due to the weaker pound.
While the overall price of smartphones has flattened out in recent years, many manufacturers have started pricing their devices at the same figure in dollars, euros, and pounds.
Mr Hamlin added: “What this means is that UK consumers are getting a worse deal. They pay more for their devices than consumers in the US or Europe. “You will have to pay,” he added.
Rising costs mean more customers are also choosing to buy devices SIM-free rather than buying them in a contract bundle from their mobile carrier.
The proportion of consumers choosing this strategy was 52% in the year to October, up from 46% in the previous 12 months.
Kanter said this is helping so-called mobile virtual network operators (MVNOs) such as Gifgaf, Voxy and Lebara, which piggyback on the networks of larger companies, expand their market share.
Meanwhile, existing players are overhauling their business models in a bid to stand out in the increasingly competitive telecom market.
In October, EE announced it would start selling refrigerators and insurance to expand its offering to appeal to more customers.
Vodafone and Three are also in talks for a £15bn merger to create the UK’s biggest mobile network. Both companies say the partnership is necessary to drive investment.
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