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Thursday, April 29, 1999 Published at 23:59 GMT 00:59 UK


Landmark Net deal for UK

Tempo will soon start selling online through the new portal

By Internet Correspondent Chris Nuttall

UK Internet users are being offered the Holy Grail of totally-free Internet access as High Street stores intensify competition with one another in the e-commerce arena.

Electrical retailer Tempo is going head-to-head with its rival Dixons with its Internet service provision offered on Thursday in competition with Dixon's market-leading freeserve.

Tempo's Michael Kraftman: "We can catch Dixons"
The no-subscription Net access and free connection calls means 118 off-peak hours a week online at no cost.

Tempo deputy chairman Michael Kraftman told a news conference that free CDs with the necessary software were now available in Tempo's 48 stores nationwide.

Internet use 'will expand' through new service

"Dixons is our greatest competitor," he said. "Tempo needed an ISP (Internet Service Provider) with a USP (Unique Selling Point) and with we have it.

"We think this is a real first, we think it's got the potential to affect the psychology of Internet use in the UK. People will have a more relaxed attitude and be able to spend more time online. We genuinely expect this will expand Internet use."

"It might take us a few years to catch up with Dixons in terms of stores but on the Internet you can catch up very quickly," he added.

Tempo could quickly catch freeserve

Mr Kraftman said a limited number of CDs would be available initially to prevent the service being overwhelmed.

But they would then be made available at the rate of 100,000 to 200,000 a month. This could see overtake in less than a year Dixons' freeserve service with its 1.5m members.

To take advantage of free off-peak access calls to the service, users have to sign up with telecoms service provider Localtel. The Surrey-based company mirrors BT services and discount schemes but offers another 10% off on all calls except for mobile phones.

Localtel prepared to grow

Localtel currently has only 3,000 customers, mainly arounds its Guildford base. Managing Director Jeremy Stokes said he was confident the service could be quickly scaled up and was already streamlined for growth.

Localtel's Jeremy Stokes: "We can cope"
Customers are billed monthly and the 0845 local number they dial for Internet access will be charged at zero during off-peak evenings and weekends. Colt Telecom is providing the terminating connection to the service.

Localtel aims to make money from the ordinary voice calls people will make after signing up for the service, despite them being discounted compared to the BT rate.

It will also share some of the revenue with Colt from Internet calls made in peak times and will earn from advertising on the portal Website set up for the service. The site's only ads at launch were for Tempo.

Tempo is providing the marketing and distribution for the service and gets an e-commerce platform to challenge Dixons out of the deal. It plans to launch an online store in a couple of months.

Tempo stores are concentrated in the Midlands and the South, but there are plans for online registration for the service and even e-mail billing for Localtel customers.

Consumers welcome move

The new service was welcomed by the consumers group, the Campaign for Unmetered Telecommunications (CUT).

Alastair Scott, Moderator of CUT, said: "We're delighted that Tempo and LocalTel, the partners in the venture, have made a bold step which, for once, takes account of what telecommunications users in this country want.

"At last, for some of the time, the ticking of the clock and the ratcheting up of the bill will no longer be an issue; tackles the principal barrier to Internet access in this country, which is open-ended telecommunications charges."

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