Tesco offers customers free on-line access

THE SUPERMARKET chain Tesco is to offer free Internet access for 10 million of its UK Clubcard holders in a bid to increase sales.

The retailer will join one of a small but growing list of service providers offering free Internet access, allowing subscribers to use their services usually for the price of a local call.

This follows the launch of a free Internet service, Freeserve, by Dixons last year. Figures yesterday from BMRB, the market research company, showed Dixons had leapt to become the UK's second most popular Internet service provider (ISP) in just six months.

Freeserve has 13 per cent of the home Internet market, behind AOL with 18 per cent, and pushing CompuServe, which was first in 1997, into third place with 11 per cent.

Tesco's move will accelerate the move towards free internet access at the expense of established providers. It hopes the offer will encourage customers who have access to the Internet through its website to buy more groceries and other services from the site.

Eventually the retailer, which was the first company to begin selling food on the Internet in 1995 and became an ISP last year, hopes to get its entire range on-line.

"We already have an e-commerce business, half our home shopping orders come from customers who choose to use the net, but we want to do more on the Tesco site by making more products available to more net users," said marketing director Tim Mason.

ISPs enable people to get on to the Internet, supplying them with an e-mail address, mailbox and, increasingly, space for personal websites.

At least six ISPs now offer a free service, making their money from advertising and technical support charges. Most still require a monthly subscription, although recently others have set up pay-as-you-go schemes with low start-up costs but higher call charges.

Tesco Clubcard members will be able to gain free access. However, although connection calls will be charged at the local rate, calls to the helpline will cost 50p.

Nearly 2,000 Tesco customers in London already use the website to order home deliveries.

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