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Subject: Re: UKNM: Not long now - free bt calls?
From: John Lundberg
Date: Mon, 24 May 1999 14:24:20 +0100

Free BT calls on the horizon?


"BT may offer free Internet calls
By Mary Fagan and Mark Court

BT is poised to revolutionise the internet by offering totally free net
access with no call charges. The move, which will need regulatory approval,
would grab the initiative away from companies such as Dixons' Freeserve.

Under the secret plans, said to be at an early stage, BT is expected to
offer internet access using a "freephone" number. Calls to the net would be
made over their existing BT telephone line and, according to City analysts,
customers would pay only a marginal increase in the normal monthly line
rental charge.

Until last year, internet users paid a monthly fee for internet access,
plus local call charges when they dialled up. Then the monthly fee was
swept away by Freeserve's entry into the market. Now BT is promising to
abolish the phone charges which can amount to hundreds of pounds a month
for heavy internet users.

BT is said to be in talks with Oftel, the telecoms watchdog, about the
plan. David Edmonds, Oftel's director general, would need to be convinced
that there would be no cross-subsidy for the service from BT's other
services. But one analyst pointed out that BT already provides transparent
accounting designed to prevent cross-subsidy.

"BT could probably make it pay through advertising revenues and deals with
content providers. But there will no doubt be some who will see this as the
big monopoly trying to protect its market share," he said.

One observer commented: "BT is playing with fire. BT's call volumes have
shot up because of internet use. If they move to effectively free internet
call charges, they could be giving away something quite valuable. In time
people will also ask why they have to pay for local call charges when they
can do internet access for free over the same telephone line." BT's plans
could wreck the prospects for Freeserve, which is considering a stock
market flotation.

A completely free service from BT, including both phone calls and internet
service provision, would be popular and would be likely to lead many
Freeserve users to switch over."

>From Electronic Telegraph:


john lundberg: developmental:
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tel: +44 (0) 171 249 3172 fax: +44 (0) 870 054 8748

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  UKNM: Not long now, Rick Sareen

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