Bad credit mobiles: Its SIM-ple really

Mobile phone companies are enjoying a renewed wave of success with SIM-only contracts as the recession bites here in the UK, sending pulses throughout the international financial world.

These 30-day rolling contracts are no obligation and many people are beginning to find the advantage of being able to enjoy contract-style deals with a high ratio of minutes and texts to money and no obligations.

Many people are finding that in the current economic climate, signing up to a mobile phone contract for up to £40 per month is not as practical as it once was.

Some telecommunications experts have pinpointed this to the fact that even though the consumer gets a free mobile phone thrown into the deal, they are tied to the contract for up to 24 months sometimes – meaning that some consumers have the potential to pay £960 over the two-year period they are on the contract.

With some telephony companies offering very reasonable contracts for as low as £7.50 a month, many consumers are saying that they are beginning to see the light of investing in a no handset, low-cost deal.

The mobile telephony industry certainly has been a buyer's market of late with the discerning consumer not having to look very hard to find the best deal. One recent contract allows consumers to call international mobile phones and landline numbers from as little as 5p per minute.

This comes as more people have been taking conscientious steps to reduce the amount of money they spend on their mobile phones, with some people even cutting conversations short in a bit to save money.

Statistics have seen a massive depreciation in the sales of the mobile phone industry. Many companies were shocked by the prediction of the market leader Nokia, who said that consumers would result in the handset sales sector shrinking globally by 10%.

One of the principle causes of this reduction is in sales comes as some consumers struggle to get new contracts because of their poor credit rating, or as some consumers struggle to keep up repayments as hundreds, even thousands of people lose their jobs on a daily basis.

Recent research from one telephony company suggested an interesting change in the trend of consumer behaviour. It is apparent that many people have been taking the steps to 'trade down' when it comes to their contract deals – that is, retaining the top of the range mobile phones that they obtained from a previous contract and then taking the opportunity to downgrade to a cheaper, no-handset deal.

One spokesman for a telephony company said this: "I see a curvy and rough and difficult road ahead but the beauty of the mobile phone industry is that we drive a big 4x4."

The hope for many consumers who have been hit by bad credit recently is that the mobile phone industry will remain a buyer's market. For the industry facing tough times, the hope is that consumers will be lured by the tempting deals that are on offer.