Tiny Computers Ltd, a UK PC retailer, has become the first British company to offer a free PC as an incentive to join its new TinyTelecom internet service provider venture. The move is certain to open the floodgates for similar offers from any company large enough to mimic or tweak the idea to its own advantage.
TinyTelecom will resell capacity from Cable & Wireless Plc, and will charge users standard British Telecommunications Plc rates. Users keep their BT line, and are billed separately for line rental and call minutes. Tiny’s billing is being provided by Swedish incumbent telco Telia AB. Users will have to sign up to spend a minimum of 29 pounds ($45) on calls per month by direct debit to get the PC immediately, or they can receive it at the end of 12 months providing they have spent the same amount.
Most telcom resellers, like Localtel Ltd and British Satellite Broadcasting Plc, attract customers by offering call charges at big discounts to BT rates. As Tiny will not be doing this, it may be able to recoup the cost of the PC fairly easily on call profits. Also, each box will come pre-installed with software to allow connection to Tiny Online, its subscription-free internet access service. Customers will be obliged to register for the ISP – artificially boosting its subscriber figures – even if they do not use the service. The company says 90% of buyers subscribe to TinyOnline, so the PC offer will undoubtedly boost the number of active users. This will create more interconnection revenues for the ISP, as well as driving customers into Tiny’s homepage and creating e-commerce opportunities.
The free PC given is a 300MHz Intel Celeron processor box with Windows 98, CD-ROM drive, modem, 3.2Gb hard drive and 32Mb RAM. No monitor is included, and Tiny does not sell them separately, but subscribers can get what the company says is an all-singing, all-dancing system for an extra 7.89 pounds ($12.30) per month over four years. They can also immediately trade in the free PC offer for a 200 pounds ($313) voucher against a higher spec box. This means the total cost of the offer to the user is a minimum of 348 pounds ($545), with a ceiling of around 726 pounds ($1137), not including calls over the 29 pounds minimum.
Dixons Plc, Tiny’s retail competitor and operator of the Freeserve ISP, is known to be currently in talks with US firm Microworkz Inc, to bring the iToaster net PC to the UK. Tiny’s offering may either make it rethink its strategy, or force it to rush the device to market in a big way. Dixons did not respond to our inquiries by press time, but rumors circulating on the internet suggest that a major high street retailer will attempt to trump Tiny over the next three days.
