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U.K. sees 1st 'free PC' deal
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July 16, 1999: 10:05 a.m. ET
Tiny Computers offers machine to those who sign on to telecom package
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LONDON (CNNfn) - In the first deal of its kind in the United Kingdom, a British computer company is offering free personal computers to anyone who subscribes to its new telephone service for one year.
Surrey-based Tiny Computers promises to ship an Internet-ready PC, complete with Intel processor and Microsoft Windows 98 software, to customers who sign on to its new telecom service for a minimum of 12 months. Tiny sold 256,000 PCs from 107 showrooms in Britain last year.
The move mirrors similar campaigns in the United States in which customers are promised free computers in return for signing on to Internet services, or, in one case, agreeing to provide detailed demographic information and receive targeted advertising.
Company spokesman Jim Buchanan told CNNfn.com Friday that the offer would allow Tiny Computers to merge the three main aspects of its business -- computer manufacturing, the telecom service and its Tiny Online Internet access operation, launched on March 31 -- into a consumer-oriented campaign.
"We're really making PCs accessible to every home in Britain," Buchanan said.
Under the plan, subscribers can make either standard voice calls or use a modem to access the Internet. They are routed over the Cable and Wireless Communications network, but charged at standard British Telecommunications rates.
The only caveat is that subscribers must agree to make at least 25 pounds ($39.18) of calls a month for a year. Tiny maintains that telephone customers spend an average of between 22 pounds and 24 pounds a month.
Tiny insists its price is a bargain since most callers pay more than 25 pounds a month when they add Internet access fees to their standard calling charges. The company is offering free Internet access to its own Internet service as part of the free-PC package.
Buchanan projected the campaign will generate a two to threefold increase in the number of computers the company ships each month. It says its currently level is between 20,000 and 30,000. He forecast total PC shipments, thanks to the new campaign, will reach 350,000, significantly boosting subscriptions to Tiny's Online service.
An estimated 6 million people currently use personal computers in their homes in the U.K. That is about a quarter of the 22 million phone lines operated by the BT network. Buchanan said his goal is to narrow that gap by getting more telephones wired to the Internet -- preferably via Tiny's own access service.
Buchanan said the Tiny offer differs from many of its U.S. counterparts in the relatively short commitment period it requires of customers.
In one recent "free-PC" deal in the United States, Micron Electronics promised a free computer to customers who signed up for its premium Internet service for a minimum of three years.
IBM and Dell -- faced with growing price competition on PCs -- are also said to be interested in the subsidized computer market.
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Tiny Computers
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