Manufacturers are already gearing up for this year’s Christmas battle, which will be centred on prepay camera phones.

Supermarkets have been out in force at the Mobile World Congress in Barcelona this week, with experts saying that we can expect another prepay war this Christmas, which looks set to be centred on five-megapixel cameras in a reduced £80-£100 price bracket.

Mobile sources said the market should get ready for an even rougher ride on the prepay market in December 2008. Several companies approached last year’s festive season with aggressive prepay strategies, and manufacturers are banking on the same this year.

LG, Nokia, Samsung and Sony Ericsson are all going big on pushing prepay handsets with five-megapixel cameras – either with new phones or bringing down the pricing of existing contract phones.

Orange led the way in last year’s Q4 prepay subsidy battle. The network had several hundred thousand LG handsets in the ‘ultra-cheap’ category at Sainsbury’s, and dominated £10-£20 offers at other retailers.

Scores of supermarket buyers have flocked to Barcelona this year. Tesco is understood to have sent five of its buyers to MWC, with the supermarket giant eyeing up exclusives, accessories and even contract handsets.

One manufacturer source told Mobile that Argos was the most important retailer in 2008 as far as it was concerned.

He said: ‘They shifted tonnes of phones for us in December, and as far as I’m concerned they offer the biggest potential for market share growth this year.’

It is understood manufacturers see ‘non-traditional retailers’ as the most important channel for growth this year.