The boss of a communications company in Keighley has warned that the days of free mobile phones are numbered - a move he says will damage the sector, forcing sales to drop.

Mike Bower, managing director of Link Telecom, which was founded in 1987 to sell mobile phones and provides business-to-business services, said the cost of buying a mobile phone has increased dramatically.

He said: "There will be no more free handsets in the future if the networks carry out their promise to remove subsidies altogether by the end of summer."

The founder of the eight-strong branch network which operates across the region said the days of good deals are set to become a thing of the past because of the Competition Commission.

He added: "The Competition Commission has decided to impose a regulatory tariff reduction on the cost of calling a mobile from a landline.

"These calls have been expensive in the past because network providers have charged BT extra to route landline-to-mobile calls through them - up to 12p a minute extra in some cases.

"The Competition Commission has now ruled this is out of order because the networks were not being seen to be competitive. However, the effect of the tariff reductions will cost mobile phone networks hundreds of millions of pounds a year in profits, which they are not prepared to stand.

"The networks have bitten back by passing on the cost to the consumer by reducing subsidies on handset sales."

In the past, the average subsidy on a phone was around £200, but the reduction in subsidies will see an average across-the-board increase of £40 on the cost of a handset.

Mr Bower added: "Each phone could now end up costing anything between £150 and £500 and from our point of view the whole face of retailing will change completely. It could have catastrophic effects across the entire telecoms industry.''