Mobiles: Fewer Australians are signing up for contracts.

Mobiles: Fewer Australians are signing up for contracts. Photo: Glenn Hunt

Mobile phone contracts are dropping in popularity as Australians increasingly opt to buy their smartphones outright, research shows.

Four in 10 Australians who acquired a new phone in 2013 did so via a phone contract, down from nearly six in 10 in 2012.

It's the first year on record the proportion of new phones acquired via contract has dipped below 50 per cent of the total, according to data released by technology analyst Telsyte.

About three in 10 Australians bought their new smartphone outright, with the remainder receiving it through work, as a gift, or as a hand-me-down.

The trend towards buying phones outright is being driven by falling handset prices, researchers said.

Mobile phone carriers are also contributing less money towards handset costs on plans, they added.

Foad Fadaghi, Telsyte's managing director, said consumers were looking to change their phones more frequently than standard 24-month contracts allow.

The Telsyte Australian Smartphone Market Study, which the company has released annually for seven years, also found the number of second-hand and hand-me-down handsets has nearly doubled over the past 12 months.

As in previous editions of the report, under-34s were most hungry for smartphones, with 46 per cent planning to buy a new handset in the next two years.

The research included interviews with mobile phone executives, an online survey of 1000 adults, and financial reports from mobile phone carriers and manufacturers.

AAP