Regulator OKs FreeServe Takeover as Portal Sparks New Online Price War

25 January 2001

The acquisition of former Dixons Stores Group-owned ISP FreeServe by Wanadoo of France was approved on Tuesday by the UK Office of Fair Trading.

The announcement coincided with news that Wanadoo now holds acceptances for 93% of FreeServe’s shares, paving the way to the creation of Europe’s third largest ISP.

FreeServe, which currently has around 2m UK subscribers, took advantage of the occasion to raise the stakes in Britain's unmetered internet access poker game. It now offers unlimited online time via its new AnyTime package, priced at £12.99 per month - £2 below AOL’s current unmetered tariff.

AOL hit back in somewhat lame fashion: “We launched our package last September,” said a spoke. “It includes free technical support that other providers charge up to 50p a minute for”. But AOL-watchers expect a more vigorous response to follow in the shape of a price cut if history repeats itself.

Freeserve said its customers would still be charged 50p a minute for using its technical support advice line - but insisted most users would not need to use the service.

News sources: The Times (London); BBC Online Business News (UK)