Whatever happened to Freeserve?
Q
I’ve been a reader since your first issue, with every copy safely filed. I was flipping through some early issues recently when I saw mention of Freeserve. I’d totally forgotten about Freeserve, so it was a nice nostalgia trip. But it also made me wonder whatever happened to this company? Back in the 1990s Freeserve’s offer of free dial-up internet seemed revolutionary. But now, the firm’s gone. What happened? How did Freeserve make its money? Or did it not make enough to survive? Mike Hunter
A
Freeserve launched in 1998 when almost all internet users needed dial-up connections to get online, meaning they would use a modem attached to a telephone line. The modem would dial the number of an internet service provider (ISP) and modulate the computer’s digital bleeps into an analogue signal that could be sent down a phone line. At the other end, the ISP would demodulate the analogue signal back into digital data (hence the term ‘modem’).
Back then ISPS charged a monthly subscription, typically of around £10 or £15. But Freeserve’s business model was different: changes in the telecoms industry made it possible for the company to claim a percentage of the cost of calls made by dial-up customers. These were not premium-rate lines, but just standard local-rate numbers.
It was a revolutionary idea that saw Freeserve rack up 1.5m subscribers in just a year, prompting owner Dixons to float the ISP on the stock market. It was valued at £1.5bn. But failure came almost as quickly as success. Other ISPS began emulating the no-subscription business model bringing new competition, while fast broadband connections began taking off. Freeserve’s reliance on profit from dial-up phone calls soon looked decidedly dodgy.
Just a year after the 1999 flotation, Freeserve was sold to French company Wanadoo. The Freeserve brand was phased out in the mid-noughties in favour of the Orange name (a Wanadoo stablemate). In 2007, Orange began deactivating neglected Freeserve accounts, a process that continued for five years. By 2012, Freeserve was well and truly dead.