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.