Absa goes direct with free Internet

Johannesburg, 11 Sep 2001

Absa and ICL South Africa have signed a multimillion-rand deal for the running of Absa Freemail, which effectively cuts Affinity Internet out of the loop.

Announcing the deal yesterday, Absa said it had "taken a strategic decision to accelerate the implementation of its e-business strategy", and the ICL deal was the first step in the acceleration programme.

"The move is the next logical step in the development of the service and will help Absa control the acceleration of its comprehensive e-business strategy," says Santie Botha, group executive director for the bank.

However, Affinity, which could not immediately be reached for comment, has been paid what one Absa staff member describes as a "success fee" for putting the free model in place and building the subscriber base.

Affinity originated the service, and acted as a management partner in a three-way deal which saw ICL SA supply the infrastructure on which the service was based. ICL says the change in contracts will not affect subscribers in any way.

Affinity is also to be considered as partner in future initiatives, including the planned extension of the current business model.

Neither Absa nor ICL would reveal the value of the deal, but the bank says the costs will be contained within its current e-business budget, although other items in the budget had to be shuffled to accommodate it.

Absa says it has a team looking at various options to offer value-added services in conjunction with its Internet service, which could be offered to subscribers at a price. Suggestions from the team are expected in January next year, after which additional services may be offered.

Absa also plans to use its now direct access to the subscriber database to build relationships with its subscribers. The bank attributes a recent 37% rise in new online banking clients and an average increase of R1.2 billion in online transactions per month to the Internet access project.

"Free Internet is built on our brand and it has spearheaded our e-business strategy," says Tasso Tsoukalas, GM of Absa group marketing. "It has doubled the monthly intake of new Internet banking subscribers and has become a strategic staircase for Absa`s other online initiatives."

The bank also plans to launch an Internet security initiative later this month, on which details are not yet available.