Plug pulled on free access

By PETER GRIFFIN

The free ride is just about over for subscribers of Zfree, the country's sole non-charging internet service provider, which is stopping its service from April 30.

Zfree has had a loyal following since it was launched in April 2000, attracting more than 200,000 subscribers in its first six months. But economic reality has forced owner TelstraClear to call an end to the cyber fun.

Zfree's 250,000 registered customers, around half of whom use the service regularly, will be offered a transfer to a new "Home 150" deal, which offers 150 hours of internet access each month, up to five e-mail addresses and free helpdesk support for $14.95 a month. Additional access is charged at $2.50 an hour.

Customers were told of the service's fate via e-mail.

Initially Zfree derived income from termination payments made by Telecom to Clear Communications for data traffic passing from the Telecom network to the Clear network. But that revenue dried up towards the end of 2000 when the interconnect agreement was renegotiated.

It was also envisaged that Zfree could be a valuable source of e-marketing and advertising revenue.

Zfree customers on sign-up were asked a battery of questions about their net use, which was to form the basis of market research for companies venturing online.

TelstraClear spokesman Patrick Carson said enormous hype surrounded the e-marketing and online advertising markets in mid-2000 when the service was born - hype that fizzled as confidence in dotcoms plunged.

He said the information gathered had been used to develop products such as Home 150.

"We identified a 'sweet spot' in the market, which is where we are transitioning Zfree customers to, and we got there for a reason - looking at the good demographics we gathered."

TelstraSaturn's $435 million acquisition of Clear Communications last November is believed to have hurried Zfree's demise along, but it was always on the cards after the business model behind providing free dial-up access collapsed.

But for loyal Zfreers, some impressive statistics have been racked up. Subscribers have spent more than 57 million hours online, downloaded more than 250 million megabytes of data and sent an average of 150,000 e-mails daily.

For customers who change to the paid subscription, e-mail from Zfree accounts will be forwarded for six months, in a deal similar to one enjoyed by Voyager clients who transferred to Xtra when Voyager folded two months ago.