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ISSUE NO 63 IN SEARCH OF THE BUSINESS MODEL

NEW FREE INTERNET OFFERS CONTINUE TO TAKE THEIR TOLL ON M-WEB

Affinity, the UK technology company which has pioneered free internet services in SA with the Absa banking group, plans to blitz the country with 12 more free internet brands this year, three of which will be launched soon.Financial services group The Liberty Group has already launched a free service for its 60,000 brokers , in partnership with Affinity, and retailer Pick ‘n Pay is also said to be contemplating the launch of a free service to the general public.

M-Web, SA’s largest internet service provider (ISP), has attacked Absa’s initiative and accused Affinity and the banking group of misleading the public about the sustainability of the free internet model. M-Web CEO Antonie Roux has raised questions about how long Absa’s service was likely to continue.

Affinity Chief Executive Wayne Lochner said yesterday his group ran 150 ISPs in the UK and a further 40-50 in Europe which did not charge subscription fees. "These are very viable models and we are not the only ones who operate them," he said.

In the UK and Europe, Affinity raises revenue for the free services through fees from telecoms networks. In SA, however, Telkom has declined to pay such fees and Affinity derives its revenue from selling other information technology products and services to companies such as Absa under whose brands it provides free internet access.

Lochner would not name the 12 SA organisations under whose brands Affinity plans to launch free services, but said they included retailers, sports organisations and financial groups. Most of the services would, like Absa’s, be free to all.

However, Lochner said his group’s contracts were on the basis that other services were bought to fund the programme. Although Affinity has not set targets, Lochner believes the group’s SA customer base could easily reach 500,000 over the next couple of years.

It has already exceeded its initial estimates, given the success of Absa’s free internet offering, which has attracted 170,000 registered users since January. Absa initially estimated it would gain 100,000 users in the first year.

Absa has said it is putting only R5m into the marketing of its service, with Affinity providing the funding to run the infrastructure. However, Lochner said Absa would also buy certain services, including electronic customer relationship management and internet-related products, in return for which Affinity provides the free internet access.

Lochner said Affinity’s costs to run an internet service were only a tiny fraction of what it would cost an independent provider because it leveraged off its global network. He said Affinity expected its costs on the initiative to be covered by revenues from Absa before the end of this year it had expected to break even earlier, but the huge growth in subscriber numbers had delayed this.

(source:http://www.bday.co.za/bday/content/direct/
1,3523,850256-6078-0,00.html)

ONLINE NEWSPAPERS MAKE LITTLE MONEY

Techweb says that a recent survey by Advanced Interactive Media Group shows that 80 percent of newspapers polled are selling some form of content online, but they are not making much money at it. Nearly 60 percent of those newspapers selling archives online, the most common means of extracting revenue from a newspaper Web site were realizing less than US$493 a month; a third planned to offer premium content on their web sites.

(source: Techweb http://www.techweb.com/wire/story/TWB20010518S0009 )

NEW PUBLICATION LOOKS AT TELECENTRE CASE STUDIES

Canadian-based Commonwealth of Learning recently published "Telecentres" as a part of its "Perspectives on Distance Education" series. "Telecentres: Case Studies and Key Issues" is an invaluable reference on community- and information technology-based telecentres in support of education and socio-economic development. It provides insights on management, operations, applications and evaluation of such centres. It draws on the experiences, insights and findings of some of the world’s leading experts in telecentres in regard to evaluation, teleworking, training telecentre managers and staff, and selecting and using technology. Details: www.col.org/telecentres <http://www.col.org/telecentres>

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