Freeserve, which has seen its share price drop since flotation, hopes to win customers with a loyalty scheme that offers free Internet time in return for time spent on the phone.
Freeserve Time users will receive credited Internet time by dialling 162 phones before making voice calls. This is then charged at 10 per cent less than BT's standard rates.
The number of free hours Freeserve Time users receive will depend on the amount per month spent on calls. Users will receive 10 hours of free Internet access for £10 or more spent, but only three free hours for calls worth between £3 and £9.99.
"Freeserve Time is yet another first for Freeserve which saves our members money and offers them completely free access to the Internet," chief executive John Pluthero said in a statement.
Telecom group Energis will supply Freeserve with network and connectivity services for Freeserve Time, but Freeserve members still retain their existing BT line and account.
AOL UK, a joint venture between AOL and powerful German publisher Bertelsmann, has said that its subscribers who pay a monthly flat fee for the service can now get a reduced flat rate of a penny per minute for all calls to the Internet. This will be the lowest ever day time rate available in the UK.
The AOL Off-Peak All The Time pricing plan has been designed to get rid of variable Internet telephone access costs - which can be as high as four pence per minute - that force consumers to restrict their time online only to the limited periods when the telephone company offers off peak pricing.
AOL claims its British users spend an average 17 minutes a day online - a quarter the time of their US counterparts. In Britain, local calls are metered and cost up to four pence a minute on weekdays, deterring lengthy Internet use.
AOL's believes its new plan marks a major leap towards complete flat-rate pricing, pioneered by AOL in the US, that has made the Internet a mass market phenomenon there.
The revamped pricing plan holds the monthly subscription charge for unlimited access to AOL at £9.99 with free member support services, and members will pay only one pence per minute for Internet telephone access costs no matter when they go online. The plan goes live tomorrow.
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