Absa is cancelling the last of its free Internet access offerings and moving towards a subscription-based Internet access model.
The move comes two years after the bank`s controversial launch of free Internet access.
The offering was scaled down earlier this year. From 1 June, non-Absa bank account holders were offered the option of using Absa Internet services for R65 a month. Absa clients were offered a discount rate of R39 a month, while Absa e-banking clients continued receiving the service for free.
Absa has now notified all free Internet access subscribers that they will have to convert to a paid-for subscription. In an e-mail circulated to Absa account holders last week, Absa said its free Internet access service would be terminated, and that account holders could register to continue using the service at a premium rate of R39 a month.
"After providing the free Internet access service for over two years, the changing Internet environment has forced Absa to move towards offering the paid-for subscription based service only. Therefore, after 31 March 2003, Absa will no longer provide the free Internet access service."
Dave Donkin, group executive of e-business and information management, says the R39 subscription is essentially a "break-even" cost and has been kept as low as possible to give as many people as possible access to Absa`s e-banking services.
At its peak, the service reportedly had around 250 000 users, prompting the market and analysts to speculate that the model was not sustainable. Analysts predicted that it was only a matter of time before the service became unworkable.
Donkin says the free Internet service was highly effective in increasing the bank`s e-banking user base. "The user base more than doubled to over 340 000 in two years."
He attributes this in part to the free Internet offering, which made the Internet accessible to many people who would otherwise not have been able to afford it.
In addition, Donkin says the free access gave about 56 000 South Africans Internet access for the first time and helped build the Absa brand. "The Absa Web site was the fourth most-visited site in SA earlier this year, according to Nielsen-Netratings."
Because of the change in the e-business landscape, Absa has "migrated to a sustainable model that we believe benefits as many people as possible".
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