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$5m budget with target of 100,000 users by Xmas

04.04.2000 - By CHRIS BARTON

Unlike the freenet service launched a month ago, which offers only 10 hours a month of free access, i4free offers unlimited internet surfing.

It differs from freenet in other respects too. Like freenet, users can sign up online, but they can also request a connection pack be sent out to them. The new service aims to pay its way through advertising revenue and commissions from online sales.

The venture is backed by direct marketing guru and National Mail director Paul Meier, Attica Communications director Wayne Toddun, and CallPlus director Malcolm Dick.

Mr Dick said $1 million had been spent to date and another $4 million spend was planned, in order to reach a target of 100,000 customers by the end of the year.

I4free subscribers are required to give detailed demographic information when they sign up, including household income, interests and hobbies.

Ms Presley said i4free would use the demographic data to provide targeted promotions for advertisers and would use electronic "viral marketing" techniques to spread the i4free message.

At present, the service offers unlimited free internet surfing and web-based e-mail. Newsgroups are not available and the only cost comes if users dial the 0900 helpline, for which they are charged $2 a minute.

The free internet trend has been slow to arrive here but is rapidly gathering momentum with freenet putting on 13,700 subscribers in just under a month. So far existing internet providers such as Telecom Xtra and ihug, which charge their subscribers $40 per month for access, have not reacted to the free phenomenon and remain sceptical that it will affect their market share.

In Australia, where free services have been operating much longer, the largest, Freeonline, has more than 220,000 registered subscribers, making it that country's third-largest internet provider.

In the United States, free access is booming, with millions of accounts in use including bluelight.com with a million users and NetZero which has 3 million signed.