CallNet debut highlights need for unmetered access - Analysts

The problems experienced by CallNet on its first day as the UK's first truly free Internet access provider, highlight the UK's need for unmetered access according to analysts, who remain sceptical on the long term prospects of the company.

Launched Monday morning, Callnet0800 found itself overwhelmed by demand, forcing it to suspend registration. This follows similar failures on restricted free Internet access schemes by companies such as Screaming.net.

Perhaps prompted by a day when they could truly nod their heads and say 'I told you so', experts believe that companies offering free access will never be able to offer a truly satisfactory service. They continue to question CallNet's business model.

On a more positive note, experts contacted by ZDNet praised CallNet's efforts for highlighting the enormous demand for cheaper access in the UK. CallNet's problems, they said, illustrate the need for unmetered access. "It highlights that you get what you pay for," said Sarah Skinner, Internet analyst at Durlacher. "Free access will appeal to those that are prepared to put up with bad quality service, after spending ages to get online. The way it's going to have to go is to unmetered access, those offering it for free will have a hard time."

The Campaign for Unmetered Telecommunications (CUT), seized on CallNet's difficulties asserting that it did not address long term issues. "CallNet... does not address any of the fundamental problems," said a spokesman for CUT. "What it does show is that there is a massive demand for unmetered access."

While analysts concede there is a market for free access services they say it may not be commercially viable. ISPs hoping to gain revenues from cross subsidiary services, such as voice calls, will find themselves with the wrong sort of subscribers, the analysts said. Those users prepared to put up with a low quality service -- such as students -- will not provide the best sources of additional revenues, the analysts said.

However it is not all bad news for CallNet. Although it is agreed that registration hiccups are not the best way to create a good first impression, the lack of true unmetered access means this probably won't deter potential users. "If they really do have the infrastructure to be able to cope with demand and can get over these teething problems they will still be able to get users," said IDC's research manager of European ISP Markets program, James Eibisch.