Tesco Mobile saw its customer base increase by 14 per cent last year to push its numbers beyond the two million mark.
Sales were boosted after Tesco Mobile became the third UK operator to offer the Apple iPhone, when it began selling it last December.
It rolled out 105 of its Phone Shops last year and has outlined plans to almost double that number by rolling out a further 100 this year.
Last year Tesco also signed a wholesale agreement with Cable & Wireless, which it said would enable it to re-launch its broadband offer to customers this year with higher bandwidth speeds and lower prices.
Tesco chief executive Terry Leahy said: “By remaining focused on our strategy Tesco has weathered the economic storm well. Across the Group, we have successfully adapted our cost structures and ranges to help customers save money when they’ve needed to and treat themselves when they’ve wanted to. Our positions in international markets and non-food meant we faced strong headwinds when the downturn came but it will be these parts of our business which will grow fastest as the recovery strengthens.
“Across all parts of our strategy – UK, International, Non-food, Services – our business is now stronger than it was before the recession. With leaner operations, improved market shares, strategic acquisitions performing well and a strong organic development programme, we’re well-placed for sustained profitable growth. And with the balance sheet strengthening, we have strong foundations in place for improving returns on capital going forward.”