Freeserve first mover into consumer broadband

Freeserve has become the first major ISP to launch a broadband Internet service for consumers.

Called FreeservePlus, it uses BT’s asymmetric digital subscriber line (ADSL) platform. The service has been piloted in Manchester since February but will be rolled out to about 35 per cent of the UK from September 4. Major cities covered include London, Leeds and Birmingham. The rest of the UK should follow next year, once BT has upgraded its local exchanges.

FreeservePlus is priced at &£39.99 (including VAT) a month, with a one-off “installation fee” of &£150. Customers pre-registering for the service will be eligible for a discount on the installation cost .

The move gives Freeserve its biggest opportunity to boost revenues since the company first launched in September 1998. Its original unique selling point of a free ISP has now become common.

Freeserve initially made a lot of money from its &£1 a minute helpline, but was soon forced to drop the price because of new competition. And its income stream from shared dial-up revenue with BT has been under threat for some time from US-style unmetered access (see Opinion, opposite).

But with consumers increasingly frustrated by standard modems’ sluggish connection to the Web, the lure of ADSL, offering up to ten times faster download times, is likely to be strong – despite the expensive price tag.

Because it uses ADSL, FreeservePlus offers an always-on connection to the Net. The much faster download times should transform the way consumers view so-called “rich media” content and services on the Web.

The FreeservePlus portal will showcase a range of new services using the enhanced video and audio functionality. They include news from ITN Radio; music and entertainment from Virgin Records, which will also offer live concert webcasts, Peoplesound.com, which will offer MP3 downloads from new and emerging bands, and Music Choice, which will provide its Hit List audio channel. Specially configured broadband games will be supplied by Gameplay, which recently announced a long-term marketing alliance with Dixons, Freeserve’s majority owner.

More broadband content partners are expected to be announced in the run-up to September 4.

Freeserve will also be promoting the fact that customers will be able to make phone calls and send faxes from the same ADSL line, while using the Net.

Freeserve chief executive John Pluthero says being first to market “shows how Freeserve is able to exploit new technologies and gain competitive advantage to the benefit of our members.”

There will only be a small amount of above-the-line marketing surrounding the launch because Freeserve doesn’t want to “fall into the same trap as some of the unmetered access people”, says a spokeswoman. “We don’t want to overstretch ourselves.”

The service will be demonstrated in ten PC World stores.

For the moment, Freeserve has the field almost to itself. Other major ISPs remain coy about their ADSL plans, and even BT’s much mooted Openworld has yet to announce an official date.