For every minute they are connected, meters at the phone company will be ticking. Under complex revenue-sharing deals, a share of the phone charges money goes to the Internet service. Ad revenues are shared between the parties as well. In Britain, the race is on to assemble huge numbers of users under one roof. British Telecom's Mr. Swingewood figures a free Web service needs 600,000 to 700,000 users to be profitable.
Many retailers are willing to press ahead though their numbers are well below that, however.
They argue that this is not about short-term profitability. Barclays Bank, for instance, provides free Web access to account holders. Its services had about 250,000 users as of early June and was adding about 10,000 a week, he said. The company sees free access as the key to popularizing on-line grocery shopping. Tesco offers the service at 22 stores and plans to expand that to about 100 by year end.