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AOL UK unmetered package 'imminent'

World ISP giant, lagging in Britain, plays waiting game with its unmetered competitors
Written by Matthew Broersma, Contributor

AOL UK is to roll out unmetered access "imminently", the company says.

Without giving details, a company spokesman says most of the conditions for flat-rate access to the service were in place, and the company would be making an announcement "within weeks, if not days". AOL has fought a long battle with BT (quote: BT) and other incumbent telcos to bring unmetered access -- the model commonly used in the US -- to Europe.

Companies such as AltaVista, ntl and a myriad of others recently began offering Internet service for a fixed monthly fee despite the fact that telephone connection charges are still charged on a per-minute basis. (See ZDNet UK's Unmetered Access Special.)

That will change soon as telecoms watchdog Oftel forces BT to offer a wholesale version of its unmetered Internet access package, Surftime, to other Internet service providers. When this change comes about AOL -- among others -- has said it will go unmetered with its main service. AOL Europe recently launched an unmetered service in Germany.

AOL was seen as slow to respond to its first big challenge in the UK market, when Freeserve (quote: FRE) launched the "free" ISP business model in 1998. Users liked the idea of getting online without paying a subscription fee, and Freeserve quickly topped AOL as the UK's top ISP -- a position it still holds today.

The new wave of unmetered services is also aimed at saving people money: even for moderate Internet users, it is often cheaper to pay a flat monthly fee than to shell out for minute-by-minute connection charges.

But while cheap, these services have had trouble keeping up with demand, leading to sporadic breakdowns by the likes of Callnet, and forcing AltaVista to up its monthly rate from £10 to £50 a year. Most industry analysts agree that even at that rate, unmetered ISPs will not be sustainable until BT introduces unmetered Internet calls.

AOL says it will cash in on those users who are willing to pay a bit more for reliability and better content. AOL has been a key player in fighting for unmetered package for ISPs, and the company says it "wanted to make the access component of the ISP market invisible".

"When access is no longer an issue, people will judge ISPs on content, quality of service, brand, in effect," the AOL spokesman said. "Under those circumstances, the strongest brands with the strongest consumer proposition will succeed."

AOL also responds to speculation that its UK subscriber figures are stagnant, fuelled last week by AOL Europe's decision to stop reporting subscriber numbers for individual European markets. Instead, in order to synchronise with the figures used by its US parent company America Online, AOL Europe will report only pan-European figures. "There is nothing suspicious about it," said the AOL UK spokesman. "Underpinning those pan-European numbers is extremely strong growth across all our markets."

US-based America Online is in the process of taking control of Bertelsmann's stake in AOL Europe.

About a year ago America Online would pay you good dosh for moderating a forum, or providing some kind of reader 'focal point'. But Guy Kewney reckons you wouldn't try this today; AOL would tell you how much YOU would have to pay THEM. Go to AnchorDesk UK for the news comment.

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