Tesco extends discounting to mobile phone plans

It has also introduced its first pay-monthly plan, which offers customers paying £15 a month a bonus of £45 -- giving them £60 credit in total.

Both plans will be flexible, allowing customers to use their credit as they choose on calls, texts or web browsing. Members of Tesco's loyalty card scheme will also receive three Clubcard points for every pound spent on credit.

Both tariffs offer customers the same flat rates for calls and texts and half-price calls and texts to five favourite numbers.

Lance Batchelor, chief executive officer of Tesco Mobile, said: "As a retailer, we know how people like to shop for their mobiles and with the launch of our first every pay monthly service and our new pay as you go tariff, we plan to be the number one choice for consumers by focusing on simplicity and great prices."

Tesco Mobile is a 50:50 joint venture between Tesco and O2. The new mobile plans follow last month's repositioning as "Britain's biggest discounter", as Tesco seeks to keep customers who are anxious about the current economic climate from switching to cheaper retailers such as Aldi and Lidl.

As well as promising to cut prices on branded goods, Tesco is introducing a range of new products that are midway in price between its Value range and premium branded products.