The deal is said to include targeted advertising based on where people are, as sensed by their smart phone. This would for example, display the latest listings of a cinema the person was next to – or Groupon discount offers for nearby shops.

Full details of the agreement have not yet been revealed, although Deutsche Telekom, which owns the popular T-Mobile brand, assured customers they should not worry about being bombarded by ads.

“There are only offers if the customer allows it,” a Deutsche Telekom spokeswoman said.

The partnership has clear benefits for both companies. Groupon will get access to millions of customers through their phones and Deutsche Telekom will explore new revenue streams – the phone company has been chasing growth in new market segments including mobile data traffic outside of its traditional fixed-line and mobile phone business.

This is Groupon’s first collaboration with a major mobile service provider as the company aggressively expands outside its US home market. Currently operating in 45 countries, it works by connecting consumers to retailers who want to offer cut-rate discounts.

The Local/DAPD/mdm