Tesco has denied claims it is to expand its mobile phone shop division in a bid to rival Carphone Warehouse.

Trade magazine Mobile reported Tesco Telecom would open 100 new stores nationwide, targeting space near and around bigger Tesco Extra stores.

However, a spokesperson for Tesco Mobile told Tech.co.uk, "The reports of our expansion are just rumours. We're very happy with the business as it is and have no immediate plans to open up that many new stores".

Mobile magazine, an industry publication, believes otherwise, reporting a Tesco spokesperson as saying: "We are absolutely focused on being the number on destination for customers looking for a mobile phone".

It goes on to say Tesco's ability to sell contract phones is comparable to that of a very large dealer, with the store shifting over a million handsets in 2006.