Metered call ISPs fail to fit the bill

NEWS Companies such as Freeserve and World Online who offer free internet service with metered call charges will struggle to attract customers in a climate of flat rate deals, such as AOL UK, according to a study published by consultancy company Analysys. Author of the report, Philip Lakelin, senior analyst at Analysys explained why customers preferred flat rate over metered access: "Heavy to moderate users will want to be in control of their surftime and unmetered, yearly or monthly packages give users a better sense of control." Speaking to silicon.com, Noah Yaskin from analyst house Jupiter Communications agreed: "Customers are willing to pay for access as a form of insurance of the service they are using. Many users will use free ISPs as a secondary source but a flat rate payment method seems more reliable from a customers point of view." Lakelin noted the confusion felt by internet users at the moment, which would inevitably drive them towards an unmetered model. He said: "The increasingly competitive market is very confusing at the moment from a customer's point of view. The ISPs' pricing models are not dissimilar to the mobile phone market, with its many pricing structures - which is a sign of healthy competition." But even the unmetered access business models have experienced difficulties over the past few months. Many industry analysts questioned whether even unmetered access business models have a long-term future in an already crowded marketplace. Yaskin summarised the industry view: "Innovative pricing is no longer a guarantee for customer acquisition. Operators are currently trying to compete on offering varieties of options." Breathe.com, a subscription fee service launched in April, sent out an email to users in which it said it would disconnect them because their level of usage "puts [its] ability to supply the service at risk". VirginNet and LineOne have put a stop to their unmetered internet access services, claiming technical and commercial hitches are holding back the services.