Tempo raises stake in Net access battle

Internet Superstore to launch cheaper rival to Dixons' Freeserve

Tempo has upped the ante in the free ISP war by launching a rival to Dixons' Freeserve - Screaming.net, which provides free evenings and weekend Net access in addition to no subscription fees.

Superstore chain Tempo is the exclusive retailer of Localtel's Screaming.net service that has cut the price of internet access for the UK. The service will launch on 29 April and the access CDs will be available from Tempo's 48 stores.

Jeremy Stokes, managing director of Screaming.net, said: 'This has to be the package everyone has been waiting for. This is a dramatic development in the so-called free internet access market and we are confident that it will revolutionise the way that people use the internet.'

A Dixons representative said: 'There are a lot of new players out there and all are going to add more competition to the market.' But she refused to comment on speculation that the high street giant intended further escalating the competition by offering 0800 access to its Freeserve service.

Tempo's move to the internet access market is believed to be the first step in its online strategy that will include the launch of an online superstore this year.

It is not the first time internet call charges have been free - pioneering ISP X-Stream regularly provides access by using an 0800 number.

Adam Daum, analyst at Inteco, said: 'It is a brave move. X-stream has run into problems because so many people wanted to access it. The danger here is that the demand will be so great they it not be able to cope.'

FREESERVE FLOAT

The flotation date for Dixons' free ISP, Freeserve, has been pencilled in for July with an expected value of #2.5 billion. Dixons appointed Credit Suisse First Boston and Cazenove to investigate 'strategic alternatives available to Freeserve' earlier in the month. Analysts believe the move has been on the cards for a few months as Freeserve will eventually need to make acquisitions and such deals would be partly funded by shares.