Dixons' free Net service hits number two spot

Freeserve, the free Internet service launched two months ago by Dixons and Energis, is well on its way to becoming the UK's largest Internet service provider (ISP), judging by the latest figures released today.

Freeserve has calculated it has slightly more than 475,000 accounts, just shy of the 500,000 mark AOL claimed to have reached at the beginning of the month. AOL is the UK's largest ISP in terms of subscriber numbers, according to Fletcher Research.

Mark Danby, Freeserve general manager, told Silicon.com: "Obviously users can have more than one account, but our statistics show 85 per cent of the accounts have been active in the last 30 days."

Around 40 per cent of Freeserve's users are also thought to be new to the Internet, leading to the claim that Freeserve has directly grown the UK online market by 10 per cent.

When Freeserve launched, some critics doubted the service's viability. However, Planet Online - the Energis subsidiary behind the service - doesn't have to operate a costly billing system, and customers are driven to Dixons-owned stores, including PC World, Currys and The Link, to pick up the free software needed to get online. Perhaps most importantly, the companies are thought to get a significant percentage of all call revenues generated by Freeserve users.

In response to critics who claim that Freeserve hasn't added up its figures numbers properly, Danby said: "There is a case for a standardised form of third-party auditing for these kind of figures, but in the meantime, we stand by the figures we've published. Consumer response has been tremendous."

Other ISPs are now looking at ways to keep up with the boom in free services. AOL recently began a national television advertising campaign in the UK, while BT is offering a Cellnet mobile phone with £5 worth of monthly calls to customers - both old and new old - who buy a year's subscription to BT Internet by 31 December.