US search engine, AltaVista, is hoping to shake up the highly competitive UK internet access market with its plan to offer UK consumers access to the web for £10 a year.
The move represents a set change in the UK industry as large as that first made by FreeServe when it launched in September 1998. While FreeServe offered free internet access consumers still had to pay for their telephone charges.
The model adopted by Freeserve has since become the most popular way of charging for internet access in the UK.
AltaVista proposes that consumers pay a one-off signing-on fee of £36 and then annual charges of £10 a year. With telephone call charges removed from the equation AltaVista is effectively offering access to the internet for 19p a week.
AltaVista aims to pay for its scheme through advertising and ecommerce. However, rivals are predicting that AltaVista will incur huge losses when it launches in three months' time.
The announcement of the deal follows the January appointment of Andy Mitchell, the former head of the internet advertising company, DoubleClick UK, as its managing director.
AltaVista estimates that in the UK the estimated average cost for users to access the internet is about £126 per year. In all it reckons it will save web users £700 million a year.
According to Mitchell: "The UK is still lagging behind the US when it comes to exploiting the internet. AltaVista is hoping to increase the number of people online and the number of internet-related jobs, which in turn will boost the British economy."
The move comes at a time when there have been increasing calls from government and pressure groups to reduce the cost of accessing the internet.