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Mobile war spreads to supermarkets

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Supermarkets were sparring over pre-paid mobile phones yesterday, after Tesco cut prices by almost 40 per cent. The supermarket chain slashed prices on four models -- Cellnet, One2One, Orange and Vodafone -- from £79.99 to £49.99. Sainsbury's said it would match the offer and Asda said it would beat it -- Asda will sell Cellnet pre-paid mobiles for £39.99 from today. Sainsbury's will sell Vodafone and One2One for £49.99 from tomorrow. Safeway has also slashed its prices to match Asda. This puts enormous pressure on high street retailers such as Carphone Warehouse, where the packages sell for between £70 and £80. Carphone Warehouse said it would match any supermarket cuts on particular brands. The Link, a Carphone Warehouse rival, said it would match Asda's Cellnet £39.99 price. Tesco said it planned to introduce pre-paid phones from the other three main network operators. John Gildersleeve, Tesco commercial director, said: "We are introducing some real price competition. "We want to do the same to the mobile phone market as we have done to the computer market -- making them easily accessible at realistic prices." It appeared that the moves were ruffling a few feathers amongst the network operators. One2One criticised the supermarkets in today's Metro newspaper: "It's the handset manufacturers that should be asked to bring their prices down, not us," said a One2One representative. "We are not actually a charity... We subsidise every handset by about £200 and there is no way we can bring down the price any further." ®

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