Tesco could soon shed its mobile phone business as part of chief executive Dave Lewis' scaling back process following a torrid 2014.
The retailer makes around £100m a year from the business it co-owns with 02, whose network the service uses. It has around 250 Tesco Mobile shops across the country.
Yet according to the Financial Times, the supermarket has been in discussion with bankers about selling what is the biggest branded mobile phone business in the UK.
As part of a cost-cutting drive Tesco is selling off a number of its non-core business assets such as TV service BlinkBox which was snapped up by TalkTalk for "significantly less" than the £10m the supermarket paid to acquire the service.
Lewis has repeatedly ruled out a rights issue as a means to raise cash and reduce debts. Other business that could be sold includes data arm Dunnhumby and restaurant chain Giraffe.
Tesco's share price was up 2.3 per cent on Friday afternoon.