Screaming net: Localtel who?

The launch last week of -- the UK's first free time online service -- comes at a price: only BT customers will be invited to the party and they will have to sign up to a new telco.

The service, launched by electronic retailer Tempo, goes one step further than other free models by offering free calls at weekends and evenings. The phone access comes courtesy of Localtel, a Surrey-based telecoms service, which became a BT customers services reseller in October under an Oftel scheme to open up the domestic market to competition.

Although it owns none of the network, Localtel will be the first port of call for customers and according to an Oftel spokesman "will to all intents and purposes be your phone company." Customers using will have to sign over their BT service to Localtel. They will still be part of BTs network and will not have to change their phone number. "The only difference customers will notice is their bills will come from Localtel rather than BT and they will get a 10 percent discount," a Tempo spokeswoman said. Initially 100,000 CDs will be available in Tempo stores but the spokeswoman claimed there would be phone line access for "two or three times" that.

Localtel is the only company so far to take advantage of BT's customer services sell-off. Potentially, Localtel could be the first of many. An Oftel spokesman said cheaper Internet calls were not the intention of the scheme but were "a nice side effect". "It is hard to say if we will see a spate of companies offering services along the same lines but the more the merrier," he said.

Not everyone believed people would be happy to convert. While a Virgin Net spokeswoman admitted the service sounded attractive, she was sceptical people would be happy about changing their telco: "That would be akin to changing your bank and is sure to put people off," she said.

Campaigners for cheaper Internet calls welcomed as the first step towards fairer telecommunications. Alastair Scott, moderator of the Campaign for Unmetered Telecommunications (CUT) said of the service: "At last, for some of the time, the ticking of the clock and the ratcheting up of the bill will no longer be an issue: tackles the principle barrier to Internet access in this country, which is open-ended telecommunications charges."

The number of free access ISPs gets bigger by the day with WHSmith and the Mirror newspaper the latest converts. Virgin Net, due to go free in May, is already reaping the benefits of the free access model. According to a spokeswoman the ISP now has 800,000 customers, and is "stealing" subscribers from AOL.