20 July 2000

A large question mark now looms over the viability of zero call-charge access to the internet, following yesterday’s decision by LineOne to cancel its recently launched “free” service. The uncertainty grew when VirginNet also that day postponed the imminent launch of its service because of a claimed need for “fine tuning”.

The cyber-jitters were further compounded by analysts who doubled to £61 million their 2001 loss prediction for Dixons-owned ISP FreeServe, due partly to the cost of offering unmetered Internet access. As a result, FreeServe shares slid 27.5p to 336p.

A LineOne mole revealed to the press that its free-call service had become economically unviable, with many members staying online 24 hours a day, seven days a week. "It was an honest attempt to launch a service that LineOne's users would want," said the source.

Instead, the company is now working on a different deal, based on British Telecom’s SurfTime low-cost package. LineOne is owned jointly by BT and United News & Media.

VirginNet, a joint venture between Virgin Group and cable giant NTL, said yesterday that it had delayed the launch of its free-call service until September after NTL experienced similar problems with its own unmetered internet service.

The Times (London)