Nine months after the launch of Dixons' freeserve as a subscription-free Internet Service Provider, two out of three home Net users are no longer paying for their ISP, according to a survey.

Fletcher Research's six-monthly poll of 40,000 Net users has revealed the extent of the free ISP revolution in the UK.

Nearly one in three, 31%, of those connecting to the Internet from home are using freeserve. BT ClickFree is next with 14%, ahead of the subscription services AOL, BT Internet and CompuServe on 9%, 7% and 7% respectively.

Virgin Net (7%) and TescoNet (5%) are now free, but Demon Internet (5%) still charges a subscription. MSN (4%) went free this month.

Challenge for pay services

Fletcher says the situation is still fluid with consumers on average having 1.3 active accounts and many existing subscribers having not yet dropped their pay accounts.

It says pay services face the challenge of keeping their subscribers in the coming months, never mind recruiting more members.

Fletcher predicts that while the number of homes online will reach 7.5 million by 2003, the number paying for access will fall to just 1.5 million, down from 2.3 million at the end of last year. It says revenues from telephone calls will exceed subscription fees in 1999.

Fletcher forecasts that 12.5 million adults (seven million at home) will be online by the end of the year, rising to almost 20 million by 2003.

freeserve 'matchless'

"In just nine months, the Internet access industry has been revolutionised by the advent of subscription-free providers," said Neil Bradford, Director of Fletcher Research, which specialises in Internet research.

"freeserve's compelling proposition and aggressive development has built a powerful online brand with a formidable lead in the UK Internet access market," he said.