By Kevin Murphy
UK internet service provider X-Stream Technologies Inc will today announce the launch of its particular flavor of subscription-free internet access in Sweden, having last Wednesday made its first step onto the continent in Norway. The London, UK-based firm has built points of presence in both countries and set up distribution and interconnect deals with retailers and telcos.
The firm has teamed up with Tele1 Europe AB, a Sweden-based telco with operations in Norway and Sweden, to take advantage of the interconnection revenues created when a user dials into the ISP. These are nowhere near as generous as they are in the UK, says X-Stream CEO Paul Myers, but the company’s revenue model is based mostly on advertising, unlike the rafts of virtual subscription-free ISPs in the UK which rely on interconnect. Tele1 will be the telco partner in both countries.
The Swedish deal sees X-Stream recruit OnOff AB, the nation’s largest consumer electrical goods retailer, as the start-up CD distribution partner, a model proven by Dixons Plc’s launch of Freeserve last year. In Norway, the distributor is Domino, a Norwegian loyalty points scheme which works through Statoil petrol stations and a number of retail chains. Myers claims this gives the firm access to 1.3 million Norwegian citizens, in a country where a third of the population is online.
Norway is a market ripe for the picking. Incumbent telco Telenor AS launched its own service a few weeks ago where users pay local phone rates plus an extra per-minute rate for dialup. A smaller start-up, Sense Wave, also launched a subscription free service recently, based on an advertising revenue model. Myers fully expects to become the nation’s biggest ISP.
The subscription-free market is more mature in Sweden, and is dominated by Spray, which last week announced plans to launch in Italy, Germany and elsewhere in Europe after a SEK500m ($60.2m) cash injection from investment group Investor AB. Myers fancies the company’s chances of becoming the biggest ISP in Sweden less, but reckons it can provide a better service than his competitors.
