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The launch of Virgin's online gas and electricity service Tuesday will bring a new round of price cuts but may not help the digital divide
Written by Jane Wakefield, Contributor

Net enthusiast Sir Richard Branson launches an online gas and electricity service Tuesday and promises to cut prices across the UK.

Virgin Energy is the first step in a new Branson plan to provide a range of household services over the Internet. The online company -- a joint venture between Virgin and London Electricity -- will provide gas and electricity which it claims will save British households an average of £50 per year.

Branson believes the Internet provides a hassle-free way of paying bills. "For too long customers have been supplied energy by faceless institutions at inflated prices. We took a look at all the waste and bureaucracy in this industry and knew we could provide a better service at a lower price," says Branson in a statement.

According to London Electricity spokesman Alex Parsons the price cuts would not have been possible without the Net. "The Internet enables Virgin to get to market very quickly, they don't have to build networks and therefore have few overheads," he says. "At the push of a button Virgin has become a national player in the energy industry."

British Gas, which promises an "all singing, all dancing" Internet service soon warns that Internet-only based services threaten to increase the digital divide. "We have to be careful not to socially exclude those customers who do not have access to computers," says a spokesman.

Admitting that only those with Net access will be able to take advantage of the service, Parsons adds the new firm is not complacent about the digital divide. "One of the challenges is to make it available to as many people as possible," he says. There are plans to put access points in Virgin Megastores and other shops.

Virgin Energy goes live in August and customers can apply now on the Web site. Once signed up, the company promises to take over the cancellation of all previous energy suppliers and customers will be transferred in 26 days. The service also comes with a Virgin Energy price guarantee -- if after the first year customers have not saved money the firm will refund the difference plus an extra 20 percent.

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