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Freeserve Confirms Dixons Deal Loss

Posted: 01st Sep, 2003 By: MarkJ

More news from Freeserve with the ISP today confirming earlier reports that it would not seek the renewal of its dialup distribution agreement with retailer Dixons:

Freeserve confirms non renewal of its distribution agreement with Dixons

Freeserve, a subsidiary of Wanadoo, a leading European company in Internet and Directory businesses, has confirmed that it will not renew its narrowband distribution agreement with the Dixons Group beyond its expiry in February 2004. A separate agreement for broadband distribution remains unaffected and will continue through to mid February 2005.

Freeserve has stated that its business goal of reaching profitability in 2004 remains the priority and that if it were to agree to the new terms proposed by Dixons to renew the agreement it would be held back from achieving this aim. Additionally, Freeserve has reiterated that it wants to continue to invest in providing the best quality of service and value for money to customers.

Over recent years Freeserve has been steadily reducing its reliance on Dixons for customer sign-ups. Freeserve has been adding new partners such as Orange, Littlewoods, Texaco and MVC and today announces the addition of the Lloydspharmacy chain, which has more than 1,300 pharmacies in the UK. Freeserve is also expanding its acquisition through other channels including online, which accounted for nearly a third of Freeserves overall customer acquisition in the first quarter of 2003. Testimony to the power of online,

Freeserve today announces a major new Broadband offer supported through advertising which is only available online and on the phone. As well as offering a free Broadband modem and connection, Freeserve is offering a No Risk Trial which gives users the chance to try Broadband for a month and get their money back if they decide its not for them. Eric Abensur, Wanadoo UK director and CEO of Freeserve stated: We have been prepared for the possibility of a non-renewal of the Dixons contract for some time. Over the past two years a major part of our efforts have focused on diversifying our distribution channels across the UK, both offline and online. Over the past months, these new distribution channels have posted substantial subscriber gains, and even topped acquisitions through Dixons in the first quarter of 2003.

We still have 5 months to run on the narrowband agreement and more than 17 months for broadband, so we will continue to maximise this time with Dixons, but at the same time we will further build on new opportunities for customer acquisition through alternative means. With the agreements coming to an end, we will lose all the restrictions placed on us as to which other retailers and partners we can strike deals with

Freeserve is five years old this month and continues to hold its lead over other UK ISPs.