Racal is hoping to cash in on the UK's enthusiasm for free Internet services, by providing the communications facilities for new free Internet service providers (ISPs).
News of the strategy came as Racal announced the expansion of its UK coverage through more interconnects with BT's network and is further evidence of Racal's ambition to break out of its traditional government and transport markets.
Racal is in discussions with several companies involved in the free ISP market, according to Trent Holmes, Racal's international carrier services director. But Holmes declined to specify which companies.
Free ISPs are able to operate without charging subscribers because of their favourable deals with telecoms carriers.
The telecoms firms can offer low rates because they benefit from increased call traffic through hosting the service. The ISPs hope to profit from advertising and Ecommerce.
Energis has said it expects substantial traffic growth from its deal hosting Freeserve. This is a model Racal wants to copy.
"We hope to be able to collect traffic or terminate it on behalf of other ISPs and see the growth Energis observed with Freeserve," said Holmes.
Racal has added 35 fibre interconnects with BT switches across the UK, extending its coverage for customers in the UK and for overseas carriers looking for coverage from a single landing point in the UK.
The additional interconnects mean Racal will save money on leased line connections between its network and BT's network, and will incur lower charges for passing on PSTN traffic to BT's network. The savings will enable Racal to provide a "competitive service", said Holmes.
But whether Racal would boost its revenue as well as its customer base is another matter, said David Brown, director at telecoms consultancy Schema.
"As an operator at the moment it makes sense to get into the market, but I can't imagine that it is lucrative," he said.
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