O2 has launched a location-based service that offers its customers access to discounts and special offers at nearby retailers.

The Priority Moments service uses GPS technology on mobile phones to identify the user's location and then provide access to special offers such as half price books at WH Smith or a free glass of Prosecco with any meal at Zizzi. The retailers are just two of 30 brands that have initially signed-up to take part in the scheme. Others include Harvey Nichols, Pizza Hut and Little Chef.

Users will be asked to confirm before they download the app they are happy for the network to track their location.

The app, which can be downloaded for free now, is available for Apple iPhones and smartphones running the Google Android platform. Although O2 confirmed any WAP-enabled device can use the service via a mobile website.

"The key word here is priority. We designed the service to make life easier, cheaper and more enjoyable for our customers," said Sally Cowdry, O2's marketing and consumer Director.

"This is not a tactical programme of one-off deals – it's about building a long-term, nationwide service that benefits both our customers and our partners. With Priority Moments we are bringing our customers exclusive, special offers and experiences from their favourite brands in a way that works for them. The combination of mobile, great offers and experiences by trusted companies with long term partnerships creates what we believe is a special service."

However, Mark Pearson, chairman of deals website MyVoucherCodes.co.uk, said the app was simply a "marketing gimmick".

"O2 should be commended for launching their voucher code marketing tool but is a shame that it lacks volumes in terms of actual vouchers, has a far smaller number of shops and retailers than others in this area such as the market leading MyVoucherCodes App and worst of all, is only open to O2 customers. Our own app is open to everyone, you are not forced to submit your mobile phone number to get the app and we have thousands of deals and bargains that anyone can use."

"It is clear that the voucher codes industry plays a vital role in the retail market and as many analysts have said, has contributed towards some retailers surviving the recent economic downturn so it is disappointing that O2 just views the arena as the right place to launch a marketing gimmick."