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Freeserve haemorrhaging subscribers, claims paper

Possibly, we say, but so are all the other ISPs

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UK free ISP Freeserve is losing over 4000 registered users every day, according to London local paper, the Evening Standard. Having pored over the ISP's IPO prospectus, the Standard reckons that for every five users who register with Freeserve, three and up deserting it for other ISPs. Such a high churn rate should worry the ISP. While it's not a dramatically higher rate of abandoned accounts than that experienced by other ISPs -- it's pretty much the same rate once quoted to this reporter by a CompuServe staffer, for example -- most users move on because for cost reasons. Trouble is, Freeserve doesn't cost anything... Except, of course, in a sense it does. The main cost involved in accessing the Net in the UK are the telecoms charges, and a good number of Internet users find that the benefits they gain from access to the Web don't actually make the price of the calls a worthwhile trade-off. Freeserve is also targetting the less technologically oriented, who are by definition probably going to get less out of the Net than their more technically literate colleagues. The Standard's line is that such a churn rate could prove a damper on Freeserve's upcoming IPO, since it suggests there's little the service can do to keep users away from the growing number of rival free Net connection services. True, but then what are their churn rates? Probably not much different from Freeserve's, we suspect. And since we may one day (fingers crossed) actually see unmetered local phone calls in the UK, the cost barrier to Freeserve should ultimately be overcome. ®

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