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Supermarket price wars: mobiles, the sequel

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Like a bunch of kids in a playground, the supermarkets just can't stop winding each other up. Now Tesco has taken the argy-bargy to the hopscotch patch, aka the pre-paid mobile market. The market leader will cut £20 off One2One models, charging what it claims is one of the lowest prices in Britiain - £49.99. All the others are expected to get the hump and follow suit so they don't miss out on the Christmas rush - when almost two-fifths of annual sales are made. But hang on. What a strange sense of deja vu. Why, wasn't it just this summer that a similar thing happened? Yes, it was August. And... Blimey! It was Tesco cutting One2One phones to a new super low of £49.99. Then all the boys joined the fun and cut their prices too. It all went awry three weeks later though when party-poopers BTCellnet and Vodafone told them to stop because it was ruining their profit predictions. The fact is that the supermarkets play a non-stop game of price cuts that are nothing more than advertising and can be easily be budgeted for. But have a look at that product's price when the next promotion is in full swing. Consumers are thus kept in a permanent frenzy and left with the feeling that supermarkets are great value for money when the simple fact is that we get ripped off each and every weekend. It is not clear whether Tesco has cut a special deal or will be making a loss on each sale, but if it manages to sell hundreds of phones to technically illiterate consumers it can rely on the luddite mentality for profitable repeat sales. ® Related stories: Asda lashes mobile carriers for price hikes Mobile war spreads to supermarkets

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