Phew! What a dial-up: UK tabloids take to the Net

British newspapers, the Sun and the Mirror both plan to launch free Internet access services later this month, Silicon.com can exclusively reveal.

BT will provide the Internet backbone for the Sun's yet-to-be-named ISP (Internet service provider) service, while the Mirror is teaming up with Cable & Wireless Communications (C&WC). The planned services are a response to Dixons' hugely successful ISP, Freeserve, launched in September last year.

A source close to the Sun said the paper is currently working on the branding of its service and is in the final stages of developing the product. But a leading new media boss said the Mirror is further down the line and is expected to beat its tabloid rival to market.

Daniel Bieler, analyst at Ovum, commented: "This would spell serious trouble for competitors like AOL, who will be lucky if they can keep all the customers they have. Having good networks backing them is important."

As with the Dixons venture, the biggest attraction for the media companies is advertising revenue, as well as free online ad space. For BT and C&WC, money is made through driving dial-up calls to the ISP over their network.

However, the newspapers' plans have already attracted some criticism. An industry expert asked: "How much of the readership actually has access to the Internet? It couldn't possibly attract the same numbers as Dixons has with Freeserve - although the growth of Freeserve will slow down. The Sun and the Mirror would be better off pushing Sky Digital TV." He quoted Fletcher Research which recently claimed only 6 per cent of Mirror readers have access to the Internet.

The Sun's venture also draws into question the future of LineOne, an online service for consumers run jointly run by BT, News International - owner of the Sun - and United News & Media.

Both the Mirror and the Sun refused to comment on their plans.

Additional reporting by Tony Hallett.