Free Access Is Killing Paid-For ISPs, Says Report

Free access to Internet services has slowed the
growth of subscription-based ISPs from 80 percent per year to less
than one percent, according to the latest Quarterly Internet Report
from Durlacher Research.

Next year, says Durlacher — whose new report is sponsored by BT —
subscription-based ISPs in the UK will actually be in decline.

By contrast, Durlacher says, there are now over 95 subscription-free ISPs
and the number could rise to as many as 200 by the end of this year.
The future for free ISPs is not, however, as secure as the figures
might indicate.

“Most subscription-free ISPs, including Freeserve, offer little to
differentiate themselves and provide little or no barriers to exit
for subscribers,” says Durlachers Nick Gibson.

“As long as users can switch accounts so easily, free-ISPs leave
themselves vulnerable to churn.”

Although many users have multiple Internet accounts, there is a
high number of users per account – two factors which have been
included by Durlacher in estimating the total number of Internet
users in the UK, now said to be 10.5 million, a figure which
includes academic and business users.

The Durlacher Quarterly Internet Report also has extensive
analysis of Internet penetration in SMEs, with 1100 small
businesses being surveyed. It was found that only one per
cent of the UK’s SMEs make full use of the Internet’s potential,
while 15 per cent were classified as “laggards” and 23.4 per cent
as “non-users.”

The Durlacher Quarterly Internet Report costs £195/annum.

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