Pay-as-you-surf with Alpha telecom's Internet scratch card

Londoners will be able to trial the no-contract Internet package next month

Britain's first ever pre-paid Internet access card is to be launched by Alpha Telecom next month, in attempt to tap into the marketing phenomenon which jump-started mobile phone usage.

From 1 August, Londoners will be able to purchase the £10 scratch card from newsagents or supermarkets. Unlike subscription-based services such as BT, AOL and Freeserve, the Alpha service will require no contracts or credit card details.

The phone-card company claims that customers will only need to type in a user name and password, and have 30 days' unlimited Internet access. If the trial proves successful, the service will soon be rolled out on a national scale.

"The popularity that we've seen with mobile pay-as-you-go packages, suggests that there is a sizeable UK market looking for simple ways to pay upfront for Internet access," said Caroline Sceats, analyst at Forrester. "But it's a more complex proposition having the same concept on a computer."

Between 1997 to 1999, pre-paid mobile packages generated more than 60 percent annual growth in customer mobile take-up, to make Europe the world's biggest market for pre-paid packages. But mobile phone companies have recently been complaining that pre-paid packages have caused them to lose money.

"The economic driver is that the customer will eventually upgrade their package to a contract service, where the handsets are no longer subsidised, and call charges are higher," said Sceats. Alpha Telecom has not yet revealed the premium that it will be placing on Internet call charges in order to make the model sustainable.

Internet analysts expect that Alpha will target the younger consumer group that has caused a massive surge in mobile pay-as-you-go take-up. "The concept will remain a parental control niche, or a convenience product for travellers, providing a supplementary form of Internet access for most customers," Sceats predicted.

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