The number of Web
surfers receiving free Internet access
services will more than triple by 2005,
according to research firm Strategis Group.
Today, more than 12 million users access
the Internet via a free, advertising-supported
service, the company said. It predicts the
number of users to grow to 37 million by 2005,
representing about 23 percent of all U.S.
Internet users.
Free ISPs offer customers local dial-up
access at no monthly charge. In exchange,
subscribers must provide some demographic
information and view advertisements.
Washington, D.C.-based Strategis partly
based its conclusions on a February survey of
1,000 U.S. households with Internet access.
"The falling cost of network bandwidth
has led to a revival of free Internet
access," said Strategis analyst Ty
Cottrill. However, free ISPs must overcome
many operational and financial problems to
survive on the long term, he said.
Today, two free access providers dominate
the U.S. market - NetZero with about 5 million
subscribers and BlueLight, a Yahoo, KMart and
Spinway alliance, with 3 million subscribers.
But neither is currently profitable, Cottrill
said.
Free and charging ISPs are technically
identical, the analyst said.
"The only differences are that people
believe that free ISPs' customer service is
worse and some are annoyed about the
ads."
Cottrill predicts that in the near future
only two groups of Internet users will exist -
those who aren't bothered and get service for
free, and those who care and pay. Therefore,
low subscription offerings won't find a
market, he forecasts.
However, there will be three basic service
models for free ISPs, the study said. First,
pure free ISPs that develop their own brand
and marketing channels; second, ISPs that
partner with an established Internet brand;
and third, ISPs that team up with a well-known
consumer or media brand to take advantage of
long- standing customer relationships.
The third model is very attractive to
financial institutions, auto manufacturers and
fast-food chains which offer free Internet
access to customers who sign up for their
business-related online services.
For
more information or to register with a free
isp, visit www.1st-Free-ISP.com/locator.html.
(Computewire)
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