RE: UKNM: Freeserve hits one million...

[Ben Thompson]

On  1 Feb, Ross Sleight wrote:


> *Won't*, because they believe that Free access without free support is not

> the way forward in the marketplace to serve new users.  Click to them is a

> starter package for infrequent users before they are sold up to a package

> like BT Internet. If the average Internet user spends circa 20 hours online,

> at an additional 1p per minute to phone call, then this comes to £12....time

> to switch methinks


Actually its would be less time than that as no discounts are allowable

on BT Click phone numbers (i.e. instead of that 25% (Friends +

Family...) discount you get nothing). 


> *Can't* because Oftel are looking over them, and I don't think its a

> competitive scenario when you allow the monopoly telecoms market to offer

> access for free - how can this foster healthy competition in the telecoms

> marketplace?  And what happens when interconnect revenues are renegotiated

> between BT and other telecoms providers (under the watchful eye of Oftel) to

> lower the interconnection rate value for the rival Telecoms companies?

> Surely BT will be/have been complaining to Oftel that they are being

> unfairly discriminated against in this area?


Not having spoken to Peter Walker (OFTEL) I cannot say for definite.

However, BT could not advertise the offer to BT customers directly and

would have to set up a separate distribution and advertising campaign.

As most of the customer acquitisation savings appear to come from using

advertising that is already bought (Dixons) or Direct Mail that would

be sent anyway (Tescos) this would probably destroy potential profits

before it began.


> And BT are probably concerning themselves with opening up the broadband to

> the house, which if these ADSL trials are successful, could mean the end of

> the FreeServe's in the next five years or so unless they can provide the

> same service through their telecoms partners ("Now sir, what type of access

> would you like...28.8kbps for free or 2mbps for £30 per month...." ) 


Not quite the sale I'd use. Try its a single monthly fee, you won't need

to turf the kid off the computer to save money and it won't tie up the

phone line. Sounds like a killer even before BT suggest reaching for

the last phone bill.


> IMHO the winners in this war are those that own either the local loop or a

> trunk system - so Cable companies, and the Energis/UUnet's of this world.

> If an ISP does not have Telecom Provider license status, then I think they

> will be in deep trouble as a service provider in attempting to provide a

> free service. Thus most of the rebadging exercises (Barclays, Mirror, Sun,

> Wh Smiths, my local grocer etc.) will utilise the big trunk owners in a

> rebadging exercise, thus C&W and Energis will be the ultimate winners

> (traffic volume up, and even if interconnect revenues go down, greater usage

> equals greater profit in the end.) BTW, to my knowledge, both Demon and

> Easynet have the status of Telecom License (Demon before it was bought out

> as well)....anyone know of any others?  (I suspect Virgin do have through

> their NTL partnership)

> 

Short term rather than long term for the trunks. After all as more and

more people go for ADSL or cable modem access the last mile will be

more and more important.


Interestingly BT feel that in the long (read long long) term they should

be able to provide ADSL access for free (with revenue coming from online

video rentals, e-commerce, banks...) . Personally I doubt it but then

again....


> I think that Steve Bowbrick mentioned on this list some months ago with

> regard to the ISP marketplace developments post Freeserve that nothing was

> really free, and I agree with him wholeheartedly in this matter.  FreeServe

> do look to Ad revenue and e-commerce revenue as part of their revenue

> generators, but my question is how much ad space can/will they sell from

> available inventory? 


Interestingly there appears to have been a serious lack of foresight on

the Tesco's site. While it is clear where the ecommerce solutions will

appear on Freeserve where are all those profitable links going to

be on in Tesco Net.


Ben


-- 

Ben Thompson <

benalljobs [dot] com

>

Alljobs http://www.alljobs.com 

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