RealTime IT News

Freeserve Claims Unmetered Access Leadership in U.K.

[London, ENGLAND] Top U.K. Internet portal Freeserve plc claimed Thursday it has achieved market leadership in unmetered access -- a field that is rapidly becoming a battleground littered with defunct services.

Freeserve says it has signed up over a quarter of a million active registered accounts for its two unmetered access offerings, the figures being accurate as of this week.

At the same time, Freeserve announced its first quarter results for the sixteen week period ended 19 August 2000. During that time, its turnover of £14.6 million (US $21 million) exactly matched its operating loss.

Freeserve's number of accounts show a marginal increase over the last quarter but a healthy 43 percent increase over the same quarter last year. Users clocked 4.0 billion minutes of use compared to 2.2 billion in last year's quarter.

As expected, along with its financial details Freeserve announced a new Internet TV portal for Bush Internet TV, ONdigital and other TV platforms. The Bush TVs are sold through electrical shops owned by its founder company Dixons -- a good example of finding synergies between clicks and mortar.

However, the deepening losses at Freeserve will give the industry food for thought -- as analysts ponder the viability of unmetered access, the service which has almost certainly been responsible for the worsening figures. In the U.K., ISPs charge customers a flat rate but get billed on a per-minute basis by telecoms operators for network use.

According to the Financial Times, Freeserve has had to subsidize the cost of its flat rate service by around 250p (US $3.5) per month per subscriber.

Freeserve Chief Executive John Pluthero emphasized the popularity of his company's unmetered access offers and pointed out that customers had increased their use of the Internet by a half since last year.

"As we extend the availability of unmetered access we will drive more users to our portals, reduce our churn, increase time online and generate higher e-commerce and advertising revenues," said Pluthero.

It is the well-reasoned argument of all top Internet companies after losing more money. We all know it makes sense.