Tesco Mobile gives discount for ad views

Tesco Mobile Image copyright Getty Images
Image caption Tesco Mobile is the first to introduce such a scheme in the UK

Tesco Mobile is offering customers the chance to get a discount on their monthly bill in return for viewing adverts on their mobile phones.

Tesco is partnering with mobile platform Unlockd to offer ads from brands such as British Airways, McDonalds and Doritos.

Dubbed Tesco Xtras, the service will be available initially to Android users.

The business model is in contrast to O2, which owns 50% of Tesco Mobile and is considering introducing ad-blocking.

The service will be available on Windows phones later but not on iPhones, because Apple's operating system does not allow that sort of functionality.

Interested customers will need to download the app and will then get £3 off monthly bills.

The ads will only appear when the phone is unlocked and users will receive an additional 200MB of data each month to cover the data used by the app.

"This innovative new service is a UK exclusive and we're excited that our customers get to benefit first from this new technology," said Anthony Vollmer, chief executive of Tesco Mobile.

Part-owner O2 is currently mulling the use of ad-blocking technology but Mr Vollmer said this did not contradict Tesco's roll-out.

"Customers can choose whether or not this is a service they want to use. Customers can still use ad-blocking software but they now have the option to get value from viewing ads - something that no-one else is doing.

"Imagine if someone gave you some cash or vouchers every time you watched a TV advert. This is not the network taking a stance against ad-blocking but it is about offering choice to our customers."

Consumer choice

For some customers and ISPs, ads are seen as something of a nuisance, interrupting mobile browsers, eating up consumers' data allowances and putting a strain on network infrastructure.

O2 is experimenting with a number of ad-blocking technologies but has not made a decision about implementing any at this stage.

'While we believe in a predominantly ad-funded internet, we see the blocking debate as a call to the ad industry to raise the bar in terms of the quality of the advertising that it delivers," the firm told the BBC.

"In line with the IAB we are focused heavily on doing so by making mobile ads data-light, relevant, engaging and non-intrusive."

Matthew Howett, an analyst with research firm Ovum, said: "Essentially it comes down to consumer choice. Some will happily accept advertising to enjoy free content, others would rather pay to avoid it.

"It does seem the time has come to have a debate about the current models and idea of putting the consumer in control - perhaps through a consumer charter."

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