Freeserve Priced Broadband Offering above Pounds 39.99 per Month with Pounds 150 Set-up Charge

Strategic Insights -

Freeserve, the internet service provider, has priced its consumer offering for broadband access in line with British Telecommunications at Pounds 39.99 per month, with a Pounds 150 set-up charge. This pricing model is expected to limit the accessibility of the service to most consumers, with Freeserve acknowledging that the wholesale price of Pounds 35 from BT will need to decrease for broadband access to become a mass consumer proposition. Despite this, Freeserve hopes to capitalize on the higher speeds of its DSL platform, offering richer content including video and audio through its FreeservePlus portal.

Key Takeaways:

  • Freeserve prices its consumer broadband offering at Pounds 39.99 per month with a Pounds 150 set-up charge, making it inaccessible to most consumers.
  • The wholesale price of Pounds 35 from BT will need to decrease for broadband access to become a mass consumer proposition.
  • Freeserve will be subsidizing customers by about Pounds 10 per month, even at the current pricing.
  • The company plans to offer a permanent connection to the internet using BT's DSL platform at faster speeds than traditional dial-up services.
  • The FreeservePlus portal will offer news from ITN and music and entertainment from Virgin Records.
  • DSL will be available on 516 BT exchanges, covering approximately 35% of the UK.
  • The company is expected to exploit the higher speeds of its DSL platform through its portal offerings.
  • Freeserve's managing director of internet portal operations, Julian Hardy, has left the company after five months, with no disagreements over the portal strategy.
  • Frank Keeling, chief operating officer, will take charge of the role until a replacement is found.

Statistics:

  • Pounds 39.99 per month: the price of Freeserve's consumer broadband offering.
  • Pounds 150: the set-up charge for Freeserve's broadband offering.
  • Pounds 35: the wholesale price of broadband access from BT.
  • Pounds 10 per month: the estimated subsidy that Freeserve will provide to its customers.
  • 516: the number of BT exchanges where DSL will be available.
  • 35%: the approximate percentage of the UK that DSL will cover.

Sources:

  • 'Financial Times' (no specific date given, but article is dated 2001).
  • 'The Independent' (no specific date given, but article is dated 2001).
  • Freeserve official press release, dated 2001.