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Tesco Mobile, the JV between the giant supermarket chain and mobile operator O2, reckons its new pay-as-you-go service will save punters up to half compared to other networks.

Launching the service yesterday, Tesco Mobile claimed its service is uncomplicated and easy to understand. And in a bid to sweep away confusing tariffs, it said that Tesco Mobile punters will be able to call UK mobiles and landlines for 20p a minute. They'll also be charged a flat rate of ten pence for texting in the UK.

Punters can earn clubcard points (Tesco's loyalty card scheme) on handsets purchased and on money spent on the service. Handsets are available from 73 stores initially, with a further 550 stores stocking the gear from next month.

In a statement, Andy Dewhurst, Tesco Mobile CEO, said: "Tesco Mobile is offering a simple, easy to understand alternative to what is currently on the market."

However, now sooner had Tesco unveiled its new service, rival operator Virgin Mobile lashed out at the newcomer, warning punters to be "aware of the small
print and catches hidden in Tesco Mobile's new service".

Virgin Mobile challenged Tesco's claim that it had launched a "clear and straightforward calling plan", insisting that its proposition was "riddled with caveats".

A spokeswoman for Tesco Mobile denied that it was burying any information in the small print insisting that it was being up-front and open.

Fending off the barrage from Virgin Mobile, she told The Register that the accusations were "selective" and "inaccurate".

"Our customers will be the judge of our mobile service," she said.

Tesco announced in June that it had teamed up with O2. Both companies plan to invest £8 million in the JV over the first two years of the tie-up. Neither side can pull out of the deal before 2008. ®

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