Virtual internet service provider Freeserve Plc, the ISP with the largest subscriber base in the UK, is getting a bad deal on the share of dialup revenues it receives, according to an up-and-coming rival. Telinco Plc, a privately-held ISP which provides the infrastructure and facilities management for virtual services like News International Ltd’s CurrantBun.com, reckons the 6% of interconnect Freeserve receives from telco partner Energis Plc pales in comparison with the 25% it offers its clients.
Simon Preston, a director of Telinco, told ComputerWire If Freeserve is getting what the analysts say they’re getting, then its getting a bad deal. I’d be very surprised if the company is not renegotiating its deal with Energis right now. The Northwich-based two-year-old was shedding the anonymity it hid behind as a provider of rebranded net services to 78 companies yesterday, as it released subscriber figures of around 600,000.
This would put it on par with the likes of AOL Europe’s UK division, but Preston confessed that the number of active users Telinco serves is much less, around 60% of those registered. And around 250,000 of those are believed to come from CurrantBun, the virtual internet service provider of The Sun, Britain’s largest circulation daily newspaper.
Telinco offers its channel partners complete facilities management, using its own modem banks and dialup connections, and renting network capacity from British Telecommunications Plc and Cable & Wireless Plc. All the partner needs deal with is maintaining its portal and distributing startup CDs. For this Telinco can give, on peak-rate dialup, up to 25% of the charge levied against the subscriber by BT or C&W. The telco takes its 50% for carrying the traffic, leaving Telinco with 25%. Freeserve is known to receive around 6% on average from Energis.
Telinco also offers telephony services, such as premium-rate numbers, and holds a full UK telephony license. It estimates it is making around 1.6m pounds ($2.6m) in revenue per month and has grown its revenues by 10 times in the last 12 months. Preston estimated that two thirds of its revenues comes from internet services. The company says it is profitable, but will not say by how much.
