Leading ISPs pull plug on unmetered net access

VirginNet and LineOne have put a stop to their unmetered internet access services, claiming technical and commercial hitches are holding back the services.

LineOne has cancelled its unmetered services altogether. VirginNet was due to launch its flat rate access nationwide earlier this month, but has now delayed its venture until September.

Neither firm would reveal the nature of the glitches, but many industry analysts questioned whether this type of net access business models have a long-term future in an already crowded marketplace.

Noah Yaskin, analyst at Jupiter Research, said: "Innovative pricing is no longer a guarantee for customer acquisition. Operators are currently trying to compete on offering varieties of options, but customers are getting more confused by complicated pricing models."

Tim Johnson, analyst from Ovum, added: "ISPs who right now are offering their services at a certain flat rate are most likely to be forced to reduce the price in few months time and that itself would damage any company's credibility."

However, Shobit Kakkar at Forrester Research said VirginNet is wise not to launch until the service is technically sound. "Many unmetered services have had bad luck recently, NTL and Libertysurf both underestimated the ability and have been overwhelmed by customer demand. It could well be that VirginNet does not want the early users rush, but lets others trial the services first."