A Year Ago: Climb aboard the free ISP bandwagon!

First published: Tue, 09 Feb 1999 17:08:22 GMT

The wave of free Internet providers is turning into a giant swell as football clubs, supermarkets and telecoms firms join the rush to ditch monthly charges.

Last week it was Tesco, yesterday it was UK football club Arsenal and today, BT. Double champions Arsenal launched its own-branded free Net offering yesterday -- the first UK football club to to this -- while BT unveiled ClickFree. And although BT played down speculation about LineOne going the free ISP route, a source close to the company said "it's in the pipeline".

North London club Gunners aim to cash in on the vast global marketing opportunities that the Web offers as well as wiring up its international fan base, according to Daniel Flesch, a spokesman from the club's commercial department. "Our free Internet site is an attractive proposition for our fans and is enabling them to keep in touch with the club and each other around the world. Arsenal is recognised as a major global brand, and our Web service is the latest way of extending that brand to the widest possible audience," he said. ICL and VIP are providing the Internet service for Arsenal which includes branded email, 56 kbps or ISDN access and local call access charges. The companies have also set up a similar, low-cost service for Bury football club.

Another UK brand to adopt this business model is the Tesco, the UK's no.1 supermarket chain, which dropped its monthly charge for TescoNet.

Meanwhile BT today said it would offer existing Click+ customers an upgrade to its new no-charge service ClickFree. It has also teamed up with Value Direct to let ClickFree users shop online for discounted products. Click+, the company's penny-per-minute service, was launched last year and caused controversy after BT admitted that a member of staff had abused customer records in a bid to poach Net customers.

And while the telecoms giant would not confirm rumours about LineOne's £9.99 monthly charge being scrapped, a source close to the company said: "it's in the pipeline, wait until the end of the week." LineOne, a joint venture with News International and United News & Media, provides UK-focused, sports, news and entertainment content. BT had high hopes for the venture but saw its membership stagnate while newcomers, such as Dixons, stole the lions share of the free ISP market. Dixons Group attracted more than one million customers in the first four months of going live with FreeServe, whereas Click+ has around 100,000 customers and LineOne between 80,000 and 90,000.

But the rush to become a free ISP in the hope that advertising and e-commerce revenues will ensue may be short-sighted, warned Nick Jones, digital commerce analyst at Jupiter Communications. "The free model is very appealing, but providers must be able to convert free subscribers into purchasers and be able to collect useful demographic data," he said. Jones believes that many ISP's have underestimated the complexity of integrating databases. "They'll need strategic vision to integrate the service with their own business. And shoppers tend to be more promiscuous online, window shopping around before buying anything. "

With the free business model gathering momentum, ISP's that merely re-sell the services of others stand to lose the most. "ISP's are traditionally very bad at content and people will question the value they offer, forcing them to revamp their offering," said Jones.

One route that fee-charging ISP's could take is offering high-speed access or teaming up with regional content providers to offer more tailored, useful services, Jones added.

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