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Freeserve offers new 24/7 unmetered package

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Freeserve should start to see its cash burn rate improve in the new year following the announcement today that it is to offer a new 24/7 unmetered Net access package from mid January.

The service - Freeserve AnyTime - is based on the wholesale unmetered Net access product, FRIACO, which caps the telco costs for ISPs, allowing them to pass on an unmetered service to customers without exposing themselves to undue financial risk.

The product will cost consumers £12.99 a month, but despite being £2-a-month cheaper than AOL UK's rival FRIACO-based product, Freeserve still expects to squeeze a margin out of the deal.

Which must come as some relief - since its current £10 a month unmetered product is costing the company between £2 and £3 a month per punter - and it's got plenty of them to make a considerable hole in its finances each month.

In September, Freeserve said it was subsidising its 250,000 unmetered users to the tune of £500,000. That's some whack.

If it can convince these users to move over to Freeserve AnyTime, then the ISP will no longer have to subsidise the online habits of its customers. A nice move, especially at a time when you're looking for a buyer.

In a statement, John Pluthero, Freeserve's CEO, said: "Freeserve tore down the barriers to entry for consumers and created an online population for the UK by being the first to offer pay as you go Internet service for the mass market."

And he's right - it's just a shame that this innovative outfit didn't forge a lead in delivering a realistic unmetered Net access product.

Still, no matter, it's here now - well, almost. And it will be interesting to see if - or how - AOL UK responds on the price. And whether Freeserve's announcement will draw any other ISPs out into the open with promises of a FRIACO-based product.

Interestingly, Paul Shalet, MD of LibertySurf in the UK, wouldn't discuss yesterday his company's plans on FRIACO, insisting that the ISP hadn't made any decision on providing a 24/7 unmetered product.

He did say, however, that FRIACO was "very expensive". Obviously, not for the faint-hearted then. ®

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