Irish Internet service providers are keeping a wary eye on developments in Britain following last week's launch of a free Internet service by the country's leading consumer electronics retailer, Dixons.

The Freesave service offers the usual features - unlimited email, Web access and Web space, simple registration, and a portal site - but without the need to set up an account and without monthly fees.

The catch? Well, customer support is via a £1 sterling-perminute premium-rate phone line, meaning Dixons is turning a traditional revenue drain for ISPs into a revenue source. Customer support has been one of the least predictable expenses incurred by many ISPs.

Additionally, Dixons' telecom partner, Energis, will generate revenue from calls to the Internet, via its telecoms interconnect agreement. Deregulation of the British telephone market allows ISPs linked to telecoms operators to receive a portion of the charges for calls to the Internet.

Initial reports that the service had 12,000 users within a week suggest that the Dixons portal site, which encourages online shopping, could become another source of revenue.

Although initial reaction from other ISPs was that they do not intend to follow Dixons' lead, some speculated that if free access became the norm, only those ISPs with links to telecoms operators would survive.

Dixons says it does not have plans to introduce the service here.