Tesco has signed up 500,000 subscribers for its UK mobile phone service, just 14 months after setting up in business.

The UK supermarket giant is what is called a mobile virtual network operator (MVNO): it manages the customer relationships and billing, while the infrastructure and network is supplied by someone else - in this case, mmO2.

The UK's best-known MVNO is Virgin Mobile, with 4.5m customers, which runs on T-Mobile's network. It may take Tesco some time to catch up - but it has enormous distribution muscle through its shops. It also has enormous traffic for its website - Tesco is the UK's biggest etailer.

mm02 has a similar joint-venture in Germany, with Tchibo, a coffee chain. Through its retail partners, mmO2 targets lower spending pre-paid customers. ®

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