Tesco is set to stock smartphones as part of plans to add more ‘top-line’ handsets and widen its range of mobile products and services.

The retailer is in discussions with manufacturers for eight smartphones, which will be in stock by the end of 2009.

It will kick-start its smartphone range in October with two cheap prepay models on the Tesco Mobile network.

The Alcatel Tribe OT-800 will be available exclusively in pink and black from Tesco Mobile, as well as another low-cost smartphone, the LG GW-300, which will be sold across Tesco’s 42 dedicated mobile shops.

Networks are yet to be confirmed for a further eight smartphones – and it is not clear if these will be prepay or contract offerings.

Tesco is hoping to entice customers onto new smartphone deals by bundling handsets with three months’ free internet allowance.

The addition of the £50 Alcatel smartphone will boost the retailer’s pay as you go offering, as it closes the gap on Argos and chases Carphone Warehouse for prepay market share.

Tesco has already expanded its product range with mobile broadband and free laptop offers.

It partnered with Orange and 3 on mobile broadband and plans to bundle the service with a choice of 30 free laptops.

Meanwhile, Tesco will expand its retail estate with intentions for 100 dedicated mobile shops by March 2010. It plans to have the outlets in all 210 Tesco Extra supermarkets in two to three years’ time.

A spokeswoman for Tesco Telecoms said: ‘We are moving into stocking a wider range of handsets with more top-end lines.’