• silicon.com
• Technology
• Networks

By Sonya Rabbitte, 1 September 2000 00:30

NEWS World Online is to plough ahead with its loss-making monthly flat rate internet service despite continuing uncertainty over wholesale Friaco service, to make sure it dominates the market once unmetered access becomes viable. Continued per minute metering between local exchanges and regional switches means World Online's Freedom 24 service costs the company £700 per month for each customer with an "always on" connection. Jeremy Stokes, Director of Consumer Services at World Online, advised other ISPs to grit their teeth and pay now in order to attract internet savvy users - predicting they will be the first group to spend heavily on lucrative broadband entertainment services. However, he said ISPs would not attract customers, or build revenue, simply on the promise of free email - they needed to become complete communication providers. "Customers are demanding a service, not just email access. We see our involvement in unmetered access as just a stepping stone into broadband offerings. We're looking at online gaming, telephony, entertainment services, and billing management." Shobhit Kakkar, an analyst with Forrester Research, agreed that World Online's business model could prove profitable for ISPs forced to compensate for BT's metered cost base. "The heaviest users generate the most ecommerce commission. They're the ones who will be willing to pay the price for broadband services. Traditional advertising revenues will also be bumped up on the back of this," he said. Stokes said that World Online hoped to avoid the pitfalls of other ISPs who were forced to cap registration. However, he did admit that World Online would have to rethink its plans if the Friaco issue was not resolved by the first quarter of next year. So far, no deadline has been set for BT to offer flat rate local loop access. Stokes said: "We may have to cap users, for example if they're using a 24 hour web cam. We're looking at a number of options open to us and that's one, but they are things we can change when the Friaco service is finalised."