The key players in Estonia's Internet service provider market have begun aggressively pursuing the country's dial-up users by offering them cheaper op-tions.
Although the ISPs are expected to capture more of the Internet market with this current campaign, experts say that dial-up access is not dead yet, and that it would carry on for another couple of years.
Starman, which operates in Tallinn and Tartu and which is the largest cable service company in Estonia, recently began offering low-speed cable access for 250 kroons ($15) per month.
There is no activation fee, but the user has no option but to get hooked up to the Starman cable TV network.
According to Raivo Hein, head of Starman's Internet division, with the speed of 65 kilobyte per second - slightly higher than the regular 56 kilobyte per second dial-up - the package should appeal to active dial-up users, whose monthly phone bills could be in excess of 250 kroons.
"We would like to put an end to dial-up Internet access in Estonia," he said.
The almost 70,000 people who use dial-up Internet access in Estonia can be divided into three basic groups, according to Olav Harjo, chief of the Internet and data division of Eesti Telefon, the largest telecommunication enterprise in Estonia.
Some people use it for online banking and for the occasional information search on the Internet. Some live in areas where no company offers "dedicated" (24-hour) access, and some just cannot afford a speedy connection.
Since 2000, all of the dial-up service providers in Estonia have so-called open numbers that require no additional payment. The client pays the regular phone call price, which is 0.13 kroons to 0.34 kroons depen-ding on the time of day.
For Starman, this is the first attempt to enter the low-end Internet access market, as the company used to deal with cable Internet connections only. Eesti Telefon, on the other hand, was one of the pioneers of Estonian dial-up era and now has about 51,000 dial-up clients.
However Peeter Kern, CEO of Starman, said he hoped Starman would grasp a 20 percent share of the dial-up market within 12 months time.
The dedicated access market for private clients consists of two realistic options: Asynchronous Digital Subscriber Line, which uses existing phone lines, and cable. Wireless and satellite Internet access is still too expensive for most private clients to afford so it is targeted to corporate users.
Starman, with 5,000 cable Internet clients, holds a strong 30 percent of the market, while Eesti Telefon has over 10,000 private ADSL clients. About 2,000 people are with other companies' cable or ADSL packages.
From January 2002, most of the Internet service providers have increased the downstream and upstream speeds of their dedicated access packages by 30 percent on average, and now the lowest downstream broadband speed at Estonian market is 320 kilobyte per second, not 256 kilobytes as it used to be.
Eesti Telefon is trying to hold the leader's position at the dial-up market and has launched several bonus-time dial-up packages in March 2002. That caused about a 3 percent growth in their clientele, and as of the beginning of 2002, Eesti Telefon had 73 percent of the dial-up market.
Half of the dial-up users spend only a few hours per month online, and their Internet bills are lower than 100 kroons, according to Eesti Telefon.
Harjo said that the dial-up era in Estonia might end when a broadband connection that enables multimedia content becomes available across the country for around 200 kroons. "That unfortunately will not happen in the next couple of years," he said.
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