The battle for the hearts and wallets of home internet users heated up yesterday with the launch of a cut-price unlimited access service.
Freeserve - owned by French internet service provider Wanadoo - kicked off its new package offering 24-hour web access for individuals for £12.99 per month, making it some £2 cheaper than similar available packages.
John Pluthero, Freeserve's chief executive, said that "£12.99 is a profitable price point for us. In the telecommunications industry scale is everything, and because of our size and number of users we get telecoms prices that nobody else in the UK can get".
Freeserve - which boasts 2m subscribers - accounts for as much as 15% of local UK telecoms traffic, according to Mr Pluthero. He expects 100,000 to 200,000 users to sign up to the new service.
The Freeserve Anytime package undercuts unmetered packages costing £14.99 a month from AOL, launched last September by the US internet service provider, and is likely to be below a similar service to be announced by BT within the next week. Unmetered access offered by cable firm NTL through its NTLworld package has recently risen from £10 to £15 a month.
Freeserve had announced the unmetered service at the start of December last year, but negotiations with BT delayed the final launch. "Knowing when it would arrive with certainty is a black science with BT," Mr Pluthero said.
BT could retaliate as early as tomorrow with its own BTinternet Anytime package, which sources say would also be priced at £14.99 a month.
• Germany's T-Online, the internet arm of Deutsche Telekom, paid the price of flat-rate net access yesterday when it announced a €125m (£ 79 m) loss for the year.
The losses were slightly better than analysts' predictions, however, and T-Online's earnings soared 86% to €797m for the year from €428m in 1999.
The healthy revenues were not enough to keep analysts happy, however. Investment bank Merrill Lynch said late in the day it was downgrading its recommendation on Europe's largest ISP from "accumulate" to "neutral".
