Two-thirds of UK internet users no longer pay for net access, and almost 50% of free access users use Freeserve, the pioneer free access internet service provider set up by retailer Dixons Group Plc. The results of a poll of 40,000 UK internet users, published yesterday by Fletcher Research Ltd, show that AOL Inc UK, the former market leader, has suffered most from the free access phenomena, and now commands just 9% of the market.
Unless they can come up with innovative new pricing models to combat the Freeserve phenomena, fee-based ISPs like AOL may see things go from bad to worse. Already British Telecommunications Plc’s free access ISP, BT ClickFree, has moved to second place in the market with 14% of net users.
The Fletcher report has little in it to comfort established ISPs. Customer loyalty in the ISP world is disappearing fast, says Fletcher, noting that 45% of home users have already changed ISP at least once, while 43% say price is the main concern when choosing a provider, against 14% who choose on brand. The average UK net user has 1.3 ISP accounts, reinforcing this point, and anecdotal evidence suggests some users open up to 10 accounts with one or more providers to pick a service depending on traffic at any given point.
Of the top 13 performers, five are subscription-based services, three of these in the top five, but overall the free services dominate. CurrantBun.com, the virtual ISP of The Sun newspaper, already takes a 3% slice of the cake, despite launching less than a month before the survey was carried out in May. BT Internet is drawing up behind AOL with 7% of the market, but the 2% gap is likely to narrow due to BT’s toll-free access weekends, introduced three weeks ago, unless AOL’s similar strategy, currently in pilot, goes live soon.
The UK’s top thirteen ISPs, in descending order, are: Freeserve, free access provider with 31% of the market; BT ClickFree (free, 14%); AOL (pay service, 9%), BT Internet (pay, 7%); CompuServe (pay, 7%); Virgin Net (free, 7%); Demon (pay, 5%); TescoNet (free, 5%); MSN (pay, 4%); Cable & Wireless (free, 3%); CurrantBun.com (free, 3%); LineOne (free, 3%); X-Stream (free, 3%).
