AOL offers Britons free service

[Guest guest]

LONDON (AP) - America Online will begin offering some of its British customers

free service, it announced today, a move widely seen as an effort to match

rivals already offering free Internet access.

 

AOL Europe will offer its free service, Netscape Online, to business and

professional users. The company plans to launch the plan Aug. 19.

 

``It's a new segment, a new slice of the Internet pie'' in Britain, said

Andreas Schmidt, president of AOL Europe, a joint venture between America

Online and German media group Bertelsmann AG.

 

Schmidt denied AOL's move was a response to the surge in business for its

rival Freeserve, the biggest Internet service provider in Britain.

 

Freeserve was launched in September by Dixons Group PLC, an electronic

goods retailer. It does not charge connection charges or monthly fees for its

1.2 million rs, twice as many customers as AOL UK, the U.S. company's

subsidiary in the United Kingdom.

 

The spread of such services has added some fizz to the Internet market in

Europe, where only 9 percent of households are now online - compared to more

than 30 percent in the United States.

 

So-called ``free'' Internet services make their money from sharing in

telephone revenues as rs dial up, from advertising and from a

percentage of any purchases made via the Internet. More than 100 Internet

service providers in Britain now offer free access, Schmidt said.

 

AOL UK will charge rs 78 cents per minute for technical help, the

same fee charged by Freeserve.

 

While playing down the impact its competitors had on its decision to offer

free service, AOL spokeswoman Rachel O'Neill acknowledged that Freeserve has

``galvanized'' the Internet market in Britain.

 

Dixons has seen its stock price more than double since setting up

Freeserve, which grabbed 31 percent of the market in its first nine months. It

plans to go public with its first share offering later this week.

 

Schmidt refused to say if AOL planned to offer free service to rs

elsewhere in Europe.

 

``We have made no decision to do so,'' he said, ``but obviously it's a

possibility.''