The Internet market is set for its most radical shake-up yet, following yesterday's announcements by telecommunications group Ocean and computer manufacturer Gateway that they will offer users free access to the Web. Another computer maker, Dell, is to introduce free Internet services to Ireland by early next year.
Existing Internet service providers (ISPs), which currently charge subscriptions, will now be under pressure to match the offers. Ocean claimed its offer would save customers - both business and residential - up to £120 (€152.37) per year, the average amount paid to existing ISPs.
But both services also charge £1 per minute for technical support to users, which existing ISPs provide free. And because both services use local access numbers rather than Telecom Eireann's special, lower-cost 1891-prefix number for Net access, users also will pay up to three times as much for daytime calls to access the Net.
In contrast to Britain, where free-net services can generate a solid revenue stream by splitting phone call revenues with telecommunications providers such as British Telecom, neither company expects to make any revenue initially from their free-net offerings. But further deregulation of the telecoms market is expected here which could make the services more lucrative.
Ocean, a joint venture between British Telecom and the ESB began its campaign yesterday, offering free CD-Roms to the public. These are simply downloaded onto a computer, which also needs an installed modem.
Users do not have to be Ocean customers and will be charged solely whatever their existing phone company levies for a local call. Neither are there registration charges.
Gateway, which employs 1,600 people in the Republic, also launched its own service called Gateway.net yesterday. Clients who order new Gateway PCs with a modem will receive systems which are already configured to access the Internet. PCs retail from around £600, excluding VAT, according to Gateway's director of marketing, Mr Mike Maloney.
Gateway has linked up with UUNet, which is owned by MCI/ WorldCom, to provide the Internet access. It has also allied itself with Yahoo! to provide custom-made Web pages. The Gateway offer includes one year's free subscription, unlimited Internet access, no registration charges, five email accounts and an e-Web mail service which allows clients to check their email from anywhere in the world.
Mr Maloney said the company would be targeting existing customers within four to six weeks, offering to get them online for a minimal cost. He added that it was unlikely clients would be charged after one year, and also expects to make Gateway.net available to the general public if, as expected, further deregulation of the telecommunications market enables free-net services to generate income.
Ocean is to distribute its CD Rom through the ESB network of shops, plus 350 Texaco garages. It will spend £1 million on a marketing campaign to promote the offer. It is offering unlimited email addresses.
Ocean chief executive Mr George McGrath said yesterday that the company was offering free access partly because it will help to "promote the Ocean brand more firmly". The company will get a proportion of the interconnect charge from Telecom Eireann when customers dial up the Ocean web server.
Mr McGrath said Ocean also hoped that some users would become Ocean customers eventually and that the service would position the company "in a fairly pivotal role" for e-commerce.
