Tesco is hoping to sell the iPhone before Christmas and hopes to kick off a price war around the popular handset after revealing that its stores will offer the 3G and 3GS models.

The exact pricing and launch date have yet to be confirmed, with the supermarket giant still thrashing out the details with Apple. In a brief statement, Tesco Mobile said that it expects to sell the handset within its stores and via Tesco Direct “shortly”.

However, a Tesco Mobile spokeswoman said: “We would love to get it in our stores before Christmas and would love to bring a bit of Tesco value to the iPhone and offer something very different to what is out there.”

Tesco Mobile, which is the country’s fastest-growing mobile operator, will offer the iPhone on contract and pay-as-you-go deals.

The surprise announcement that Tesco could be selling the iPhone before Christmas comes as a blow to both Orange and Vodafone, which have fought hard to win the right to sell the mobile phone after O2’s exclusive two-year agreement with Apple lapsed in early November.

With Orange hoping to attract substantial new customers to the network after launching the iPhone in time for Christmas and Vodafone not able to launch the phone until next year, Tesco’s entry into the market could offer potential new customers a cheaper alternative over the next month.

It will come as a relief for many people who had hoped that Orange would kick off a price war only to be disappointed when the operator revealed a pricing structure similar to that already offered by O2.

It is a coup for Tesco Mobile, which is 50 per cent owned by O2, which has beaten not only Vodafone, but also T-Mobile and 3, in the race to sell the handset. The UK’s largest retailer last week revealed plans to strengthen its position in the broadband and fixed-line telecoms markets. It hopes to generate £2 billion in annual sales and £200 million in profit in the medium term.

Times Recommends

• Toyota recalls 437,000 cars including Lexus
• Myners says bonuses are bleeding pension funds
• Japanese company faked safety reports on seats