Free ISP Service Market Said to Be Reviving

As the cost of bandwidth falls, the market for free Internet access services
will more than triple by the year 2005, says a new study from market research
and consulting firm The Strategis Group.

Today, more than 12 million users access the Internet via a free,
advertising-supported service, the study says.

That number is expected to
grow to 37 million by 2005 and will represent about 23 percent of all
residential Internet users, Strategis Group says.

“The falling cost of network bandwidth and the development of sophisticated
tools for personalizing and delivering content to targeted users has led to a
revival of free Internet access,” said Ty Cottrill, senior analyst and author
of the new study, “Residential Internet Access: The Free ISP Model.”

“Ad-supported Internet access providers have made an auspicious debut in the
(ISP) industry, attracting subscribers, investment capital and attention,”
Cottrill said.

“Free ISPs now must focus their efforts on demonstrating that
the millions of subscribers they serve can be translated into a profitable,
long-term business. The market appears receptive but free ISPs must
overcome many operational and financial obstacles to
achieve longevity.”

While mass-market retailers (such as Kmart’s BlueLight.com) have been among
the first to offer Internet access as part of their overall customer service
strategies, such companies as financial institutions, automobile
manufacturers and fast-food
restaurants, are likely candidates to offer such service to customers and
employees, the study found.

Organizations such as alumni groups and political
parties also are strong candidates for expansion of the free ISP model,
Cottrill said.

The Strategis Group publishes industry research reports, provides customized
consulting services and supplies information solutions to the cable TV,
satellite, Internet, competitive telephony, broadband and wireless
communications industries.

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