Tesco Mobile has reached the milestone of 2.5 million customers on Christmas Day this year after experiencing its best ever Christmas sales.

Tens of thousands of Tesco Mobile handsets were activated on Christmas Day with the iPhone proving the most popular Christmas gift for customers.

The network experienced double digit airtime growth in every quarter of 2010 as it attracted new customer types through new service and product offerings.

It is still the only network to offer the iPhone on a 12 month contract for consumers and now has a comprehensive selection of smartphones in its range including the iPhone 4 and newest Blackberry models.

The award winning network* grew both its Pay as you go and contract base in every quarter of 2010 despite a highly competitive mobile market.

This success has seen Tesco Mobile grow its customer numbers by 25% in 2010. This year saw the network move into the contract market bringing more choice for consumers with the launch of 12 month contracts as well as market leading 24 month options.

Tesco Mobile continues to innovate in the mobile tariff space, recently launching two new deals aimed at the youth market, offering low cost monthly contracts with a high end handset and unlimited social networking.

The mobile operator is a joint venture between Tesco and O2 which utilises the O2 network and therefore provides first class national coverage for both voice and data, a choice factor for consumers which is becoming increasingly more vital as the uptake of mobile data rapidly increases.

Growth of the Tesco Mobile network has also been fuelled by the roll out of Tesco Phone Shops.

There are now almost 200 Phone Shops across the UK providing Tesco shoppers with convenient access to a comprehensive range of Tesco Mobile phones, mobiles for other major networks, accessories, broadband services, landlines, top up and Tesco international calling card.

*Best Pay as you go mobile network for customer satisfaction – Uswitch mobile survey 2010 and J.D Power and Associates Mobile user customer satisfaction report 2010.

The retailer has just launched its first standalone Phone Shop in Bristol allowing customers on the high street to benefit from Tesco Phone Shop value and have access to the Tesco Mobile brand.

Tesco Phone Shops have also seen growth internationally across the Tesco estate and there are now Phone Shops in Slovakia, Czech Republic, Poland, Hungary, Turkey and South Korea.

Lance Batchelor, Chief Executive Officer of Tesco Mobile and Tesco Telecoms said: "Tesco Mobile is well on its way to becoming the number one MVNO in the UK. It is continuing to grow its Pay as you go and Pay Monthly base in a declining market space which highlights the network's appeal to our mobile savvy nation. We have a unique position in the mobile market place because we are able to reward customers in hundreds of ways through Clubcard. We're focused on giving consumers real and valuable rewards that encourage their loyalty and help them get the best value from their provider. The rapid expansion of the network of Tesco Phone Shops in 2010 has enabled us to deliver service and value through telecoms retailing to millions of Tesco Shoppers and has brought Tesco Mobile as a network to the attention of consumers."

Notes to editors.

About Tesco Mobile: Tesco Mobile is a 50:50 joint venture between Tesco and O2. The company sells exclusively Tesco Mobile branded services in Tesco stores across the UK using O2's technology and network. The service gives Tesco Mobile customers value, simplicity and choice, offering them supermarket style offers and the chance to earn Clubcard points when buying handsets and call time.

Published on 12th January 2011