High street companies across Europe are poised to follow the UK's lead and launch branded Internet access services.
According to a report from the Yankee Group Europe, a growing band of major European retailers, banks and media companies have recognised the benefit of creating digital relationships with their customers by providing Internet access that is free or undercuts traditional providers.
The report's author, David Pringle, said European high street names have closely monitored the success Dixons found with Freeserve and even without the regulatory loophole in the UK that makes it viable for an ISP to offer a subscription free service, many European companies are eager to offer their own cheap access services.
"Even though conditions are different across Europe, retailers have realised that being an ISP is a good way of generating traffic and forming an online relationship with its customers," said Pringle. "If they are not at the access point they are reliant on portals which is expensive and so they might as well run an ISP themselves."
Currently only a few big high street names in continental Europe have such services. There is Freesurf from Sunrise Communications in Switzerland which has Swiss bank UBS, retailer Migros, Swiss Federal Railways, TeleDenmark and BT as its partners.
In Germany Citibank offers a cut price access service with Viag Interkom and electrical goods retailer Conrad.
Pringle warns incumbent telcos like Deutsche Telekom and France Telecom that have market leading services could lose out to these new entrants, as they will have the advantage of high street distribution that made Freeserve such a huge success.
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