Altavista heralds net revolution

The cost of using the net is plummeting

UK consumers are to be offered unlimited internet access free of telephone charges for just £10 a year by US search engine Altavista.

The move could give millions of people affordable net access for the first time and dramatically shake up the UK Internet Service Provider industry.

This represents a step-change in UK internet usage

Patricia Hewitt

The plan will involve subscribers paying only annual charges and a signing-on fee of £36 - with all internet access being provided through a free 0800 number.

Instead of taking a proportion of the call costs, or a monthly fee, Altavista aims to pay for its scheme through advertising and e-commerce. But rivals say it stands to make big losses when it launches in three months' time.

Altavista's plan

One off charge: £35 - £50

Annual charge: £10 - £20

Available within 3 months

May be limited to 500,000 users

No registration details yet

Andy Mitchell, managing editor of Altavista UK, said: "The UK is still lagging behind the US when it comes to exploiting the internet."

In the UK, unlike most of the US, internet access is charged at local phone call rates - estimated to average out for users at about £126 per year.

The firm reckons it will save web users £700m a year.

The move was welcomed by the UK's e-commerce minister, Patricia Hewitt.

She told the BBC that the move, which has followed government pressure on other internet providers, could lead to a step change in UK internet usage in the next few months.

Industry shake-up

The move by Altavista will spark the biggest shake-up in the industry seen since the launch of Freeserve in mid-1998.

The UK is still lagging behind the US when it comes to exploiting the internet.

Andy Mitchell, Altavista

Freeserve, now the UK's largest ISP, was the first mass market one not to charge users a monthly fee, instead relying on a cut of call charges plus advertising and e-commerce.

Freeserve said it would decide its response when Altavista's service went live in three months.

"Freeserve is the number one internet service provider in the UK and is championing free subscription which has done a lot for consumers' access to the Internet," a Freeserve spokesman said.

AOL, the second biggest UK ISP, which has been campaigning for unmetered access, welcomed the development.

"We would welcome the fact that another company in the industry has realised, as we have, that something has to be done about providing unmetered access to consumers," said Matt Peacock, director of corporate communications.

Recently there have been other moves towards unlimited access, with cable firm Telewest offering totally unlimited access for £10 per month, so long as users make at least £10 of other phone calls a month.

The owner of the UK's main phone system, BT, last week launched a £9.99 monthly package which allows free call up to the internet between 6pm and midnight each day and all weekend.

Subscribers limited

There have also been some smaller ISPs which offer varying combinations or quality of free access.

The demand for unmetered access is undoubtedly there, with Telewest having problems coping with the rush of people wanting to sign up to its deal.

To ensure it does not get overwhelmed, Altavista will limit the deal to about 500,000 subscribers in the first six months.

Altavista, which as a search engine allows users to find information on any topic listed on web pages, claims to have 45 million different users across the world.

At the time of its UK launch in December, it said it would rapidly include 40 million web pages, or 95% of the total in the UK, on its UK-only search pages.