Sainsbury's, the UK supermarket, has announced it is teaming up with Vodafone to launch its very own mobile phone network to take on Tesco and others.

Called Mobile by Sainsbury's, the new UK network will be run as a joint venture between the high street supermarket and Vodafone UK. It will combine the Sainsbury's brand and retail distribution with Vodafone's technology and network. The service will target Sainsbury's customers both in store and online. 

Mobile by Sainsbury's, which will launch later this summer, will "reward customer loyalty, and offer great quality value-for-money mobile products together with attractive offers", says the new venture. Nectar points will also be on offer, although details on pricing and why it will be different from Vodafone's standard offering haven't been given.

"We are delighted to announce this partnership. Together with Vodafone, we'll be able to develop mobile products and services that represent great value for Sainsbury's customers," said Justin King, Sainsbury's CEO.

Luke Jensen, Sainsbury's group development director, adds: "Our customers trust us to provide top-quality products and service at fair prices, and Mobile by Sainsbury's feels like a natural extension of our brand as well as a great way to reward our customers."

The news comes as Three announced plans to shake up the pay-as-you-go market in the UK, with a one tariff fits all offer. From 1 July Three PAYG customers will be able to make calls for 3p a minute, texts for 2p a minute, and use data for 1p per MB.