TELECOM Digest OnLine - Sorted: T-Online Launches No-Frills Internet Brand

T-Online Launches No-Frills Internet Brand

Lisa Minter (
Tue, 28 Dec 2004 12:28:28 EST

FRANKFURT (Reuters) - Germany's dominant Internet service provider,
Deutsche Telekom unit T-Online International, has launched its
no-frills brand Congster in a fight back against German low-cost

T-Online launched the Web site where clients can sign
up for Congster's low-cost Internet access, targeting users of cheaper
competitors such as or United Internet with a stripped-down
Internet access.

Unlike T-Online and the rivals, Congster does not offer subsidies for
hardware needed for high-speed, or DSL, or for the sign-up fees
first-time users have to pay, targeting tech-savvy clients which
already have a DSL service but seek change.

"Congster is clearly aiming for customers who already have DSL, who
already have e-mail, have the hardware, and know how to set up their
PC to use it," said a spokesman for Congster, a fully-owned T-Online
subsidiary, on Tuesday.

On its Web site, Congster offers an online form with which prospective
customers can easily set up a letter cancelling their existing DSL
account with 15 of its rivals if they sign up with Congster.

T-Online's namesake brand, which connects 11.3 million users in
Germany to the Internet, is significantly more expensive than those
rivals as it offers additional services such as premium content,
e-mail and anti-virus software.

Congster, without these additional services, is offering its cheapest
rate at 3.99 euros per month including 2,000 megabytes of
data. Freenet charges 5.90 euros for the same data volume, and
T-Online's fee is 9.95 euros for just 1,500 megabytes.

T-Online, which its parent Telekom wants to reintegrate by buying back
all stock it does not own in a 3-billion euro $4.06 billion) bid, has
lost market share over the past 12 months amid a fierce price war for
DSL Internet access in Germany.

The Congster spokesman declined to say how many clients the new
service hoped to gain, or how many had already signed up. He said
customer numbers could be reported next month. Telekom is due to
report customer numbers for the quarter to December on January 27.

T-Online stock, for which Telekom is offering 8.99 euros per share in
a tender offer that expires in February, traded unchanged at 9.74
euros by 3:57 a.m. EST.

Freenet stock was up 1.2 percent at 19.28 euros and United Internet
was unchanged at 19.75 euros. All three shares are constituents of
Germany's high-tech index TecDAX which was 0.1 percent lighter.

($1=.7386 Euro)

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