BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific Arabic Spanish Russian Chinese Welsh
BBCi CATEGORIES   TV   RADIO   COMMUNICATE   WHERE I LIVE   INDEX    SEARCH 

BBC NEWS
 You are in: Business
Front Page 
World 
UK 
UK Politics 
Business 
Market Data 
Economy 
Companies 
E-Commerce 
Your Money 
Business Basics 
Sci/Tech 
Health 
Education 
Entertainment 
Talking Point 
In Depth 
AudioVideo 


Commonwealth Games 2002

BBC Sport

BBC Weather

SERVICES 
Friday, 26 January, 2001, 09:55 GMT
Fixed price surfing arrives
Freeserve's internet offering
Freeserve bought its own phone lines to launch unmetered services
The jungle of unmetered internet access is about to change from an unpenetrable bush to a forest with criss-crossing footpaths.

Most of the people who will sign up for this new package will already be clued up about the internet and will not need any help

Freeserve spokesman
This will allow more UK consumers to enter.

But it will also increase the likelihood of them getting lost.

The changes will come after the incumbent telecoms operator, British Telecom (BT), ends its monopoly and allows its competitors to use its phone lines to local exchanges.

The deadline set by the telecoms regulator Oftel for BT to do this is 1 February, although it could take months before the full benefits trickle down to consumers.

But in time, BT's competitors will be charged flat rates to use its lines, as opposed to per-minute rates as they do now.

This is expected to attract a slew of so-called ISPs, or internet service providers, keen to grab a share of the market for unmetered online access.

Confusing offerings

Each ISP will be offering slightly different services at varying prices, and it will be hard for consumers to ascertain their reliability until it is too late.
Red Hot Ant's website
An example of the pitfalls awaiting consumers

Some ISPs have been offering unlimited internet access for months, in spite of their access difficulties.

Not all of them have managed to match their costs with their earnings.

And many investors are avoiding a sector where costs tend to be high and where profits are, at best, represented as visions for the future rather than as cash today.

RedHotAnt

A striking example of the pitfalls consumers may fall into was displayed on Wednesday when the police and trading standards officers raided the offices of the troubled ISP RedHotAnt.

RedHotAnt's customers were left high and dry when its telecom supplier WorldCom disconnected its lines because the Ant had failed to pay its bills.

RedHotAnt users were charged 130 for internet access for a year, and their fees have not been refunded.

"The recent fall-out within the technology sector has meant that it has been impossible to secure the necessary funding to continue operating the RedHotAnt unmetered service," the ISP said in a statement on its website.

One of RedHotAnt's customers, Janine Baker from Bournemouth, told the BBC Watchdog programme: "I am very annoyed with them. They gave me four hour's notice."

Before signing up to the Ant, Janine had been with IGClick, another ISP offering 24 hours a day, seven days a week access.

She joined in September last year and paid 40 to register and another 30 for the whole year.

Three days after she had signed the deal, she received an email saying that IGClick had suspended all their unlimited access deals, and from now on she would have to pay extra for every minute she was online.

"I have now spent a total of 140 for three months which is not a very good deal and I want my money back," Janine told the programme.

Market leaders

The main path through the maze of ISPs will be staked out by the dominant Freeserve which already connects nearly one in three surfers in the UK.
AOL website
AOL's unmetered service has helped growth

Freeserve has acquired an extensive phone line infrastructure of its own to reduce its dependence on BT, although it will continue to buy some services from the incumbent.

Its new offer is for unlimited internet access for a flat monthly fee of 13.

This may help it increase market share, given that its two main competitors, AOL and BT, which each connect about 15% of the UK's surfers, operate with charges of 15 per month for equivalent services.

Service charges

AOL, which launched its unmetered internet service during the autumn, is scathing about the Freeserve offering.

"We launched our package last September. It includes free technical support that other providers charge up to 50p a minute for," a spokeswoman said.

Internet surfer
Surfing 24 hours a day, seven days a week
Freeserve's spokesman's response was that "most of the people who will sign up for this new package will already be clued up about the internet and will not need any help".

Some Freeserve users have also criticised the quality of its service, as it has struggled to meet demand.

BT's all day, any day, unmetered service is to be available later this month.

"As customers spend more time online, they're realising that reliability and connectivity are the critical drivers of value," said Ben Andradi, chief operating officer of BT's unmetered offering.

Mr Andradi insisted that BT would score high in these areas.

Connection difficulties

Not all consumers would agree, though. All the three market leaders have often been charged with focusing more on signing up new customers than serving its existing ones.

Internet Magazine has uncovered falling standards in terms of dial-up time for both BT and Freeserve, while AOL has refused to cooperate with the magazine's testing team.

Yet, there is little doubt that consumers will rush forward to take up the ISP's offers of unmetered internet access.

Computer
Blurred vision: consumers are confused
"We are experiencing the fastest growth in our history, fuelled by UK consumers' tremendous enthusiasm about the unmetered service," said the managing director of AOL UK, Karen Thomson.

The cable company NTL, which has been offering some customers unmetered internet access since last summer, can confirm that people are hungry for its services.

But the company also knows that costs can be higher than initially anticipated.

On Wednesday, NTL said the cost of its unmetered internet service for customers on other networks will rise.

At the moment, this service costs 10 per month and includes an equivalent amount of free voice calls. The price will rise to 15.

See also:

08 Nov 00 | Business
AOL: Unmetered web access for all
24 Jan 01 | Business
The cost of getting connected
08 Jan 01 | Letter From America
The magic of the internet?
17 Jan 01 | Business
BT pay phones play the internet game
01 Oct 98 | Sci/Tech
BT clicks into Net access
13 Nov 00 | Business
UK web access breakthrough
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories