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NTL offers free UK Web use
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March 7, 2000: 8:31 a.m. ET
Increasing competition as latest free- calls offer follows AltaVista launch
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LONDON (CNNfn) - U.K.-based cable operator NTL said Tuesday it will offer Web users in Britain free Internet access including fee-free calls to the Internet, increasing the pressure on established access providers such as Freeserve and British Telecommunications to cut their charges for online time.
The announcement by NTL (NTLI: Research, Estimates), which is in the process of buying Cable and Wireless Communications to become Britain's No. 1 cable company, came the day after U.S. Internet company AltaVista promised U.K. users unlimited Web access for an up-front fee of up to 50 pounds ($79).
Shares in Freeserve tumbled 13 percent Tuesday, extending the previous session's 5 percent fall, on concern its business model won't withstand a cut in phone charges. NTL shares, which trade on the U.S. Nasdaq market, on Monday fell 1-1/16 to 95. The company made its announcement before U.S. markets opened Tuesday.
NTL's new service, to be called, ntlworld and set to launch in April, "will help the U.K. in a drive to lead the world in making e-commerce, e-entertainment and e-education available to everyone," said NTL Chief Executive Barclay Knapp.
Currently, Internet users in Europe pay call charges to telephone operators for every minute spent online, as well as subscription fees to some to some service providers. The British government and analysts have accused telephone companies in the U.K. of holding back growth in Internet use by levying metered call charges.
AltaVista yesterday cited research conducted on its behalf by Datamonitor showing that the annual cost to the consumer of going online with no-subscription Internet services such as Btclick.com and Freeserve, the U.K.'s biggest service provider, is 126 pounds a year, based on the cost of local-rate phone calls.
"Freeserve have probably got 70 to 75 million pounds left in their war chest," Miles Saltiel, an analyst at WestLB Panmure, told Reuters. "They are going to have to increase their rate of spend, which has been 10-15 million pounds a quarter, in order to match the free service deals that are now emerging."
NTL cabled homes will be entitled to free Web access if they subscribe for a package including phone and television services, costing at least 9.99 pounds a month. Customers who use BT as their telephone provider but want to take up NTL's service would be charged a one-off 10-pound fee for a telephone adaptor and would be expected to spend at least 10 pounds a month with NTL on voice calls. 
--from staff and wire reports
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