High street supermarket chain Tesco has launched its mobile phone service, Tesco Mobile, with the first flat-rate call charge of 20p per minute to all UK mobiles, regardless of network, and landlines.

"Working out what you get charged when you make a call can be very complicated. Tesco Mobile is offering a simple, easy to understand alternative to what is currently on the market," explains Tesco Mobile boss, Andy Dewhurst.

Instead of using the tradition peak and off-peak call rates, the new service simply charges 20p per minute at all times, to all lines, apart from up to three landline or Tesco Mobile numbers designated as friends and family, which are charged at 10p per minute. Customers will be charged a flat-rate of 10p for UK text messaging, or 5p to family and friends numbers.

This tariff makes it cheaper than almost all its rivals when it comes to calling numbers on other networks. The only real competition comes from T-Mobile, which charges 20p per minute if you spend between £10.01 and £20 on calls in a month, or 10p per minute if you spend over £20 per month. All the other operators charge at least 5p more per minute, and some charge up to 30p more.

Tesco is encouraging shoppers to pick up a handset with their groceries, offering phones at 73 of its stores and also via its website. For those who spend over £25 on a single shop before Christmas, it is offering a £25 discount on any handset in the range. Clubcard holders will gain points when they purchase a handset or top-up their pay-as-you-go call time, at a rate of four points per £2 spent instore, or two points per £2 spent elsewhere.

The scheme is being run in partnership with O2.

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