Nationwide offers discount Net connections

Nationwide has become an ISP in a bid to become a one-stop shop for its online customers. The building society is offering Internet access to its customers for just £7.50 per month.

The company has been offering home PC and online banking services on its Flexi current account for over a year, in which time it has attracted over 50,000 customers.

A spokesman for the company said: "It makes sense to offer a one-stop shop. It will hopefully encourage new customers - we don't want to replace traditional methods of banking but provide new opportunities."

The Royal Bank of Scotland - which went live with its Internet banking facilities in June - said it doesn't think offering ISP services will be enough to make customers change banks. "Yes, it clearly gives Nationwide some marketing advantage, but bank account choice is based on whether the account meets their needs," said a spokeswoman.

When asked if the Royal Bank of Scotland has plans to follow suit, the spokeswoman said: "We have no immediate plans, but it is something we are looking into."

The news comes only a few weeks after Tesco announced its ISP service at the slightly higher price of nine pounds per month. David Kennedy, chief executive of the Internet Service Provider Association (ISPA), welcomed the move. "More competition in the market can only be a good thing and will drive prices down," he said.

Tesco's and Nationwide's services are running over BT Internet's infrastructure.