AOL joins battle in free ISP fray

NEWS AOL today makes its push into the UK's free ISP market with the launch of Netscape Online, its first subscription-free service. The move marks AOL's attempt to fight back after watching its UK market share fall over the last nine months. In January, the runaway success of the Dixons-owned Freeserve knocked AOL off the top spot as the UK's largest ISP, with other free offerings, such as X-Stream and the Sun newspaper's currantbun.com, gaining in popularity. Netscape Online, part of AOL's joint venture with German publisher, Bertelsmann, will charge no monthly fees. Users just pay their local phone charges for the time they are logged in. AOL has been accused of reacting too slowly to the demand for free services, but James Eibisch, analyst at IDC, said the company still stands a good chance of success. "Only 15 per cent of the population are regular online users. If you take a long-term view of the mass market it's not too late at all. "The service should succeed on branding. A lot depends on service quality, content and ease of use - if it is bad quality it doesn't matter who you are. But brand strength should push it high up in the free ISP stakes." Eibisch added that Netscape Online would probably be aimed at the 'new lad' market. "It fills a gap in the company's range," he said. "AOL is a family service and Compuserve is for the small business user." AOL is also planning to unveil a new access model in Germany this week, where the company hopes a flat rate strategy will undermine the dominance of telco, Deutsche Telekom. AOL was unavailable for comment.