AOL still has no plans to provide free Internet access and email, despite seeing diverse retail stores starting to adopt the Dixon?s Freeserve model.
Retailer Toys R US is to offer CD-Roms in its 61 stores nationwide from this weekend, offering free Internet access and free registration. WH Smith is also thought to be on the verge of launching a similar service.
Electronics store Dixons was the world?s first high street retailer to offer free Internet access four months ago. It now claims to be the biggest Internet service provider in the UK with 900,000 subscriptions and 700,000 active users.
?We are always looking at our pricing in light of the market, but we have no plans at the moment to go free,? a spokesperson for AOL told VNU Newswire, ?We think that people still attach a value to something they pay for, obviously there will be those who want free accounts who are used to them, such as student.?
?The worry must be are they sending out a mixed message?? added the spokesperson. ?They have good, strong brand names, but not in providing Internet service and support.?
AOL charges #4.95 a month for its service which includes three hours online time, thereafter it costs #2.35 an hour. The average spend is around #10 a month. Technical support is free, whereas both Freeserve and Dixons are charging support at #1 per minute. ?If you are a new user it could be very expensive hand holding with these free services,? said the AOL spokesperson.
Dixons was unavailable to comment on Toys R Us? move, but Virgin Net which is currently still charging for its service said it was not surprised.
?As more people go online, retailers will have to adapt their businesses to sell their products online, so I'm sure we'll see a flux of them throughout 1999. I think there's room for everyone, there's still more than 80 per cent of households still to go online,? said Virgin Net?s spokesperson.
Toys R US, which claims its free service could save consumers #200 a year on Internet access. It is running the service through Virtual Internet Provider, a venture between Cisco, Fujitsu owned ICL, Softbank and Cable & Wireless.
Like Freeserve, Toys ?R? Us is looking to draw revenue from ecommerce and also advertising.
The UK market for Internet retail is expected to hit $5 billion by 2003, or two percent total retail, according to Fletcher Research. The UK currently has eight million Internet users, compared to 7.3 million in Germany and 4.2 million in France.
The Toys R US service also includes five free email addresses, 10Mbyte of web space and nationwide local call access.
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