Anne Foster-Chia, aged 44, denies causing the death of Dorothy Andrews by dangerous driving.
Sheffield Crown Court was told Foster-Chia pulled out of Cartnerknowle Road into the path of traffic travelling along Abbeydale Road on December 7 2005.
Lisa Timms - who was driving towards the city centre - managed to break to avoid a smash, but Jelle Fisher - travelling in the opposite direction towards Woodseats - could not stop in time and the cars collided.
Michael Slater, prosecuting, said Foster-Chia's Toyota Rav 4x4 then spun into Langdale Road, colliding with Mrs Andrews who was trying to cross the street. She was flung 14 metres down the road.
Mr Slater said: "The defendant failed to stop and give way at the junction because she was paying more attention to her telephone rather than keeping a proper look out for the traffic conditions unfolding in front of her."
Mobile phone records show no calls were made or received at the time of the collision.
Foster-Chia said her phone had become detached from a device on the dashboard just before the incident, falling to the floor and flicking open to connect to a call - but she had not been distracted by it.
But Mr Slater said: "The defendant has told lies of some significance to cover up what she did at the time."
The court heard both Mr Fisher and Ms Timms said lights at a pelican crossing near to the scene of the accident were on green.
But in police interviews Foster-Chia, of Ecclesall Road South, said they were on red - meaning she believed it was safe to emerge from the junction.
Mr Slater said CCTV footage of the area showed traffic had continued at a constant speed.
Ms Timms said she had seen the Toyota Rav travelling along Cartnerknowle Road "at some speed," and the woman driver's head and right shoulder were titled as if supporting a mobile phone.
Speaking from the witness box she said: "I could tell it was not going to stop.
"It was as if the vehicle had not realised there was a junction there. From the way she was sat I presumed she was on the phone.
"After the collision I saw her holding a phone up to her ear - I could see the phone at that time and she was talking at that moment. That was straight away after the collision but both the cars had stopped."
Simon Myers, defending, said CCTV footage showed there was another car travelling in front of Ms Timms - but Ms Timms said it must have passed the junction before the collision because she had a clear view of what happened.
Foster-Chia claims the car flashed to let her out. The trial continues.