Absa`s free Internet services may be about to come to an end, leaving more than 250 000 users high and dry, according to a report in this morning`s Business Day.
The news comes on the back of announcements that the company is planning to re-register all its current users as well as cut off user accounts that have been dormant for more than 30 days.
Absa started the free Internet service in January in an effort to attract new users to its banking services. The service, which exceeded expectations, quickly signed up more than 150 000 users, and currently stands at around 250 000.
First signs of strain became evident just over a month ago when Absa announced it was dropping the services of Affinity Internet in favour of a multimillion-rand deal with ICL to provide the Internet technology behind its service.
At the time, the company said it had "taken a strategic decision to accelerate the implementation of its e-business strategy" and that the ICL deal was the first step in the acceleration programme.
Market speculation suggests the free offering from Absa is becoming too much of a drain on its financial resources, particularly since the company cut its ties with Affinity, which co-sponsored the offering, leaving Absa to foot the entire bill.
The technology contract with ICL runs until September next year. Santie Botha, Absa group executive director, has admitted there is a team "investigating the options" but has not confirmed whether the findings may result in the free service being closed down.
A source quoted by the Business Day suggests that Internet service provider M-Web may be a possible partner for Absa if the company decides to end the free offering. Anthonie Roux, M-Web CEO, has been one of the loudest critics of the service since its inception, and he has previously said M-Web would be interested if Absa decided to exit the free Internet market.
Market analysts, however, are not surprised by the suggestion that the free ride may soon be over. Gordon Taylor, an ICT analyst at Meryll Lynch, says "there is no precedent globally for such a service to survive". He says it was "just a matter of time" until the service became unworkable.
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