Carphone Warehouse, Europe's biggest independent mobile phone retailer, is to launch its own mobile phone service in Britain called Talkmobile after signing a wholesale deal with Vodafone Group.
Vodafone said today the deal was part of its commitment to grow its share of the wholesale market, which it estimates to be worth around £1 billion sterling (€1.43 billion).
Vodafone has already signed wholesale deals this year with supermarket group ASDA and navigation systems company TomTom.
Talkmobile will be a mobile virtual network operator, renting capacity on a network.
It offers customers the chance to sign up to a nine-month mobile phone contract, less than the average contract length, from £12 (€17.24) a month.
The announcement comes a year after Vodafone withdrew its British mobile contracts from Carphone in favour of selling them through rival retailer Phones4u.
The decision sent Carphone's shares tumbling but it has since regained some contract business from the mobile giant.
Shares in the mobile retailer were up 4.2 per cent at 344.25 pence at 11:25 a.m. after analysts at Collins Stewart reiterated a "buy" recommendation on the stock on increased hopes of a further tie-up between the two groups.
Vodafone shares were up 0.7 per cent.