T-Mobile boss warns that cheaper SIM-only deals will rise

Sales of SIM card only mobile phone price plans are set to surge in the coming year as customers postpone upgrading, Jim Hyde, the UK chief executive of T-Mobile, has warned.

"We have definitely witnessed an increase in sIM-only deals as the credit crunch has impacted customers," said Mr Hyde. "People are staying with their devices for longer, which isn't necessarily a bad thing for us." He added that despite the difficult environment, instances of customers defaulting on their payments remained low at the German-owned group.

Mr Hyde said that sales of the Google phone, which is being rolled out to UK customers through his network, were encouraging but he declined to give detailed numbers.

His comments came during a difficult week for the telecoms industry.

Last Friday Nokia, the world's largest mobile phone maker, issued its fourth profits warning in a year, saying that sales in 2009 were likely to decline.

Earlier in the week Vodafone posted a 35 per cent fall in half-year profits, cutting its full-year sales outlook and promising to slash costs by £1bn. But shares in the group surged on the news by nearly 14 per cent on the week.

On Thursday BT said it was cutting 10,000 jobs in the UK.