The UK's first pre-paid internet-access card is due to hit the shops next month as phone-card company Alpha Telecom seeks to tap into the huge cash market that kick-started Europe's mobile phone revolution.
Unlike popular fixed-rate packages from BT, AOL or Freeserve, Alpha's £10 scratch card will require no contracts or credit card details.
From 1 August, Londoners will be able to buy a card at a newsagents or supermarket, key in a user name and password and have 30 days' unlimited web time.
Alpha plans to sell the cards nationally soon afterwards.
"Feedback from distributors and agents was that there'd be great demand for an unlimited service without the need to commit to long-term contracts," said Giles Redpath, Alpha's chief executive officer.
"The pre-paid mobile market shows that a certain customer group finds it easier to pre-pay, so it's the same idea applied to a new market."
The surge in mobile use in 1997-99 was driven by pre-paid packages, which generated more than 60 per cent annual growth in customer take-up to make Europe the world's biggest market for pre-paid packages, with 256 million users or 68 per cent of the population. Internet penetration, by contrast, is only 40 per cent of the population.
"London distributors will focus on the key customer base – the ethnic card market," said Mr Redpath, whose company has 70,000 signed-up pre-paid residential customers spending an average of £22 per month on international calls.
"Our most popular destinations are Africa, Australia and New Zealand, Pakistan, Bangladesh and India, and there's big demand for internet access in those communities."
Mr Redpath has also been able to refocus the company since it was bought out of administration last year. The firm made its first post-administration profit in April this year and is aiming at £600,000 profits by the end of the year on £10m sales.
And Mr Redpath has no intention of stopping at internet access.
This means that he will also be looking at opportunities in mobile telephony, prepay-per-view digital television and money transfer.
"We're looking around for a credit card issuer," he said. "Credit card penetration in Europe is quite low – 35-40 per cent in the UK but only 10 per cent in Germany. There's a whole population of the 'credit-challenged' and the youth market, and many places, like the internet and mail order, where they can't shop."
American Express and 7-Eleven have trialled "stored-value cards" in the US but so far this cash concept has not made an impression across the Atlantic.Reuse content