Clear Communication’s new low-end free Internet service provider zfree isn’t free at all, but it’s not Clear that collects the revenue.
“We offer a free Internet service — Telecom is charging you for using your phone to make a call,” says Clear’s online services director, Ian Scherger.
The difference may not be clear to customers who sign on for free Internet access. They will be charged two cents per minute after the first 10 hours' use by Telecom for making an Internet call to Clear’s non-0867 numbers. Telecom introduced 0867-prefix numbers late last year and Clear is steadfastly refusing to adopt them.
“We’re encouraged by the progress i4free is making in its court case [against Telecom] and can see a viable model in offering free Internet access.”
Clear argues that the numbers it uses for Internet access are governed by the existing number portability agreement between the two companies.
However, that doesn’t mean Clear Net will cease to exist. It will be targeted at the business user and high-end individual, while zfree is targeted at the mass market who want cheap access.
Revenue will be gathered by a trio of means — advertising on the site, a kick-back from Clear’s interconnection charges to Telecom and by becoming an e-commerce hub. Business-to-consumer providers will allow zfree to “punch the ticket” of anyone who buys product online via the zfree site. Since zfree requires users to set its site as home page, the potential earning could be quite high.
“Colmar Brunton figures show there are 80,000 transactions per month from New Zealand, yet 90% of those go offshore. We want to encourage New Zealand e-business,” says Scherger.
The arbitrage system will, however, run its course by the end of the year when Telecom and Clear sit down to re-negotiate the interconnect agreement.
The zfree service will offer Web-based email hosting, news group access and a “superior quality of free surfing” but shouldn’t conflict with ISP i4free’s service.
“There’s enough room in the market for more than one player,” says Scherger.