Bullish Freeserve set for unmetered access battle

Freeserve, the UK’s largest quoted Internet company, is pinning its hopes on being the market leader for unmetered access.

The company, which is 80 per cent owned by electrical goods retailer Dixons, reported losses of &£13.5m after tax for the first quarter ended August 19 – three times the previous quarter’s loss.

Although sales doubled to &£14.6m, Freeserve spent &£14m on marketing in the first quarter alone, at a time when most dot-coms cut back on advertising budgets.

But chief executive John Pluthero has hit back at suggestions Freeserve is in trouble, claiming it has already signed up 250,000 customers for its unmetered access service. He believes the numbers would have been greater but for BT delaying increasing phone network capacity.

Signing up a new customer costs Freeserve about &£2.50 in calls, but Pluthero says Freeserve is best placed in the scramble for free-access customers, after AltaVista scrapped its package in September. He says: “As we extend the availability of unmetered access, we will drive more users to our portals, increase time online and generate higher e-commerce and advertising revenues.”

Freeserve had around 2.1 millions registered users at the end of September.

Freeserve plans to increase revenue by rolling out its new Internet TV portal through partners Bush Internet TV and Bush Internet Surf set-top boxes. The sets will now be sold through Dixons and Currys from October 16.

Many of Freeserve’s existing content partners have been signed up for the TV portal, which include popular channels such as entertainment, news, sport and shopping.

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