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October 27, 1999

StrayDuck Launches – Telinco Makes Unmetered Net Effort

By CBR Staff Writer

Telinco Ltd, the telecoms company/ISP behind a number of high-profile UK virtual net access services, yesterday took the wraps off its StrayDuck.com service, promising toll-free dialup every third week and revealing some e-commerce initiatives. The service, while cheaper than others on the market and with some promising revenue streams, has failed to impress many net users in the wake of Tuesday’s CallNet Plc’s subscription-free 24/7 toll-free service announcement.

StrayDuck promises to let consumers build up toll-free minutes to be redeemed every third week by spending minutes in the other two weeks dialing up a conventional local-rate number. An average usage figure is established from these two weeks, and this is how many free minutes are received in the third week. For example, a user spending 100 minutes dialing up one week and 200 the next will receive 150 free minutes in the third. In the near future, Telinco will introduce a scheme where users can buy free minutes with Beenz, the internet reward point currency offered by Beenz.com Inc.

Margins are small, each toll-free minute costs Telinco 1 penny, less than it would receive from its share of an off-peak local call minute. But Telinco reckons the bulk of its revenues will eventually come from its always-on profile-targeted banner ad bar and Hoojit.com, its new proprietary e-shopping directory. Hoojit makes money by charging e-commerce sites a click-through fee on shoppers searching for items in its product directory. It has 5,000 categories, and expects to list 2.5 million individual products by Christmas.

On the subject of the competition, Telinco is suspicious of CallNet. Chris Matthews, chair of the London-based company, says it would cost a company 15 pounds ($24) per user per month to offer unlimited toll-free access, based on usage trends under a metered dialup environment. CallNet hopes to recoup this through people opting to use its voice telephony services (which they are at liberty to ignore) but Telinco reckons the average consumer monthly spend on voice is around 12 pounds ($19.75) and CallNet must have something else up its sleeve.

Telinco has around 850,000 users, 10% of which are direct, the remainder come through virtuals like News International’s CurrantBun.com. The firm is currently negotiating the purchase of an as-yet-unnamed Swedish ISP, is due to open is Paris office shortly, and is forming a joint venture in Spain.

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