AOL in the UK is due to reach a half million in membership this month, overtaking its older stablemate CompuServe and giving it double the number of subscribers of third-placed Demon Internet in the ISP league tables.

Jonathan Bulkeley, MD of AOL UK talks about the service

Trailing in the Big Three's wake are the Microsoft Network, BT Internet, Virgin Net and Line One. Making a late challenge are BT's new low-cost pay-as-you-use service BT Click+ and Dixons' no cost Freeserve.

No official figures are available for these new offerings launched in the past month, although 100,000 of the Freeserve CDs are reported to have flown out of Dixons, Currys and PCWorld shops in the first week.

Comparing the cost

BT Click+ adds a penny a minute to the local call charge for connections, with users invoiced on their regular quarterly phone bill. It works out at £1.80 for three hours online per month.

While Dixons' connection costs nothing other than the local call, there is the matter of £1 a minute for advice from technical support, for which many first-time Internet users taking advantage of the offer may find a need.

In theory, AOL UK should be worried by the hot competition in the content and ISP stakes. It charges £4.95 a month for three hours online and £16.95 for unlimited access (£14.95 if a year is paid for in advance)

Portal power

Much more expensive then than the newcomers, it is also seeing its advantage of original and engaging content being eroded by the news, financial information and other features being introduced for free by so-called portal sites.

Sites such as Excite, Netcenter, MSN and Yahoo are designed as one-stop shops for Net users and fulfil most needs. Why pay to access the walled content of AOL?

Jonathan Bulkeley, managing director of AOL UK has plenty of reasons why.

Bulkeley: Plugging free tech support

"The market in the UK is not mature enough yet to want to assemble things from the Internet," he told me at the company's Fulham offices, "Users like everything bundled, easy to use, with customer support, all in one place."

AOL 4.0 on its way

He demonstrates what he means with a tour of the UK version of AOL's 4.0 software, now in Beta and due for a full release at the end of November.

Getting to where you want could not be clearer in the AOL environment down to a specially-packaged version of Railttrack's Website, with fewer clicks for finding train times than the company's own Internet version.

Bulkeley enters the Chat area where 12,000 rooms are open daily in six countries, he has a Buddy list to tell him who else is online, and there is also AOL's instant messaging service.

AOL is all UK-based content, but access to material in other countries is only a couple of clicks away. A recent deal with the streaming audio and video specialists, Real Networks, will mean more multimedia being introduced.

Free customer support

With Dixons in mind, the feature Bulkeley is keen to emphasise is free technical support. "Forty per cent of our members call us every month, that's 200,000-300,000 calls," he says.

Whether this is a testament to the unsophisticated membership base or a problem with AOL's software is unclear. Perhaps they just like to talk.

But the AOL UK chief sees the service as offering enough features to attract sophisticated users as well, though the company's acquisition of CompuServe means that audience is well catered for.

Market big enough for everyone

"There's some crossover between the AOL audience and the CompuServe audience, but what we're trying to do is to position CompuServe as a service for the workplace or professional and AOL more as a home service for everyday computer users.

"CompuServe has been in the UK market for about eight years, AOL has been here for just under three, but there're no plans to merge the companies or brands at this point."