Three offers new pay-as-you-go deal

Competition in the pay-as-you-go mobile market stepped up after Three unveiled a "back-to-basics" deal that reverses the trend towards bundled deals.

In a move that could spark a price war in a neglected area of the market, the smallest of the UK's four main mobile players is offering a calls rate of 3p a minute, 2p a text and 1p per 1MB of web data.%VIRTUAL-SkimlinksPromo%

Unlike the other "confusing" 179 pay-as-you-go deals on the market, it said there will be no bundles or time limits on how quickly customers must use up their phone credit.

In another sign of increasing competition in the market, Vodafone said it has teamed up with Sainsbury's to give the supermarket its own mobile network this summer. Sainsbury's will be joining its other supermarket peers who already have mobile partnerships, such as Tesco and Asda. Called Mobile by Sainsbury's, the company said the service will reward customer loyalty through mobile products and Nectar points.

Vodafone was unable to comment on whether the so-called mobile virtual network operator (MVNO) will be able to offer 4G to its customers.

There were 38 MVNO players in the UK at the end of 2012, according to the latest figures from telecoms regulator Ofcom.

In recent years mobile phone contracts as long as 24 months have become the norm. But alongside this the pay-as-you-go market has become increasingly popular like contracts with extra conditions such as a need to top up every month.

Thomas Malleschitz, marketing director at Three, said: "The number of complex pay-as-you-go tariffs, add-ons and options available is mindboggling. Consumers are forced into choosing where they want best value - whether that's calls, texts or internet. Our new rates strip things right back to basics with a simple, clear and transparent rate for calls, texts and internet use that offers clear value across the board."

According to uSwitch telecoms expert Ernest Doku, Three's offer would support those who underestimate how much they will be using their phone. However, he said it remains to be seen whether Three's proposition shakes up the market.

The move comes as mobile operators put the finishing touches on their 4G networks to compete with EE, which launched the new services late last year.

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Three offers new pay-as-you-go deal

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