on, and by 1999, there will be 35 million. Europeans will make up a big part of these new on-line subscribers.
Three major U.S. on-line services -- CompuServe, AOL, and Microsoft Network (MSN) -- are operating in Europe. They've been joined in the battle for members by Europe Online, operated by Burda of Germany.
As the pioneer service in Europe, CompuServe is well positioned to take full advantage of the opportunities Europe presents. It has offered dedicated local coverage for over five years to the U.K., Germany, and France. Today, CompuServe offers access points in 17 other European countries as well.
In March 1995, AOL teamed up with the German media group Bertelsmann to enter the European market. Initial countries targeted for the AOL/Bertelsmann Online service are Germany, France, and the U.K., with Spain and Italy slated to be next. In November 1995, Deuts
che Telekom joined the partnership. Last year, Deutsche Telekom transformed its videotex service Btx/Datex-J into a modern PC-based on-line service with full Internet access. It's called T-Online. Today, this service has almost 900,000 members and offers local access to 90 percent of Germany. It features multispeed access points for all modem types and ISDN boards. Although T-Online is currently present only in Germany, there is a possibility that it will be available on a broader basis in the future.
Experts reckon that T-Online and AOL/Bertelsmann Online will cooperate closely in the German market, and that AOL will focus on services for home users and T-Online will expand its service for businesses. AOL went on-line in Germany in December 1995, with the U.K. and France scheduled to come aboard this quarter.
MSN provided localized contents in France, Germany, and the U.K. in August 1995. This was parallel with the launch of Windows 95. MSN provides access points in Scandinavia and some other Eur
opean countries, but no localized contents for these countries.
Europe Online planned to offer its service by the middle of 1995, but it took until December for it to offer its first commercial services in Germany, France, and the U.K.
Localizing Content
Each company claims that its content has been tailored to a European audience. All services provide complete Internet access, including free World Wide Web browsing as well as English, French, and German versions of their access software.
The localized services of CompuServe, for example, include daily European news via U.K.-based services such as the Press Association and Reuters. Dentists, doctors, and lawyers can join the U.K. Professionals Forum, where the talk and articles are in a language they can understand and relate to. In addition, CompuServe has computer support forums for the U.K., Germany, and France.
In the U.K., CompuServe recently established a U.K. Shopping Mall. U.K. members can now order goods sim
ilar to those that U.S. members have been able to purchase for years. Top London department store Selfridges has even joined in. "We think on-line shopping will play an important role in retail over the next decade," a spokesperson for Selfridges says, "and CompuServe is a good way for us to get involved."
On-Line Translations
For its international membership, CompuServe offers an on-line translation service. For a premium, users can have documents converted from English to French or German. In the future, it might be possible to write an E-mail message in German and have it automatically converted into French or other languages.
CompuServe is currently reinforcing its service in other European countries. Since the end of last year, it's offered a Spanish version of its Information Manager access software. It also enhanced its Dutch service by linking up with the Dutch news agency ANP to provide a daily diet of international news in Dutch to its 17,000 members in the Netherlands
.
Today, CompuServe boasts 350,000 members in all parts of Europe. For the newcomers, competing with this established service is difficult. On the other hand, according to industry observers, CompuServe recently cut its tariffs to stay competitive. As it does in the U.S., CompuServe charges Europeans a flat $9.95 for 5 hours of access. Additional hours cost $2.95. All billing is charged in dollars regardless of the country. However, it plans to change fees to local currencies this year.
In Germany, AOL is charging DM 15, including 5 free hours, and an additional DM 4.50 per hour. Europe Online announced that its basic fee will be around DM 15.
Microsoft's Pricing Is an Issue
Microsoft has received strong criticism from European members for its pricing. Where U.S. members pay $4.95 a month for 3 hours of access, European customers pay the equivalent of $10 a month and get only 2 hours of access. Microsoft officials say that the costs of setting up the network are much more
than they are in the U.S. However, Bill Gates has said that, "We're aware of the pricing problems and are going to try to do something about it."
A crucial point in the on-line business is the percentage of a country's population that is able to reach the service with a local phone call. All new services claim they will have a local coverage of between 70 percent and 80 percent in France, the U.K., and Germany during the first half of this year. CompuServe has 11 access numbers in Germany, nine in the U.K., and seven in France. However, they are located only in big cities.
The number of access points can be a misleading measure of regional coverage. This is so because to increase coverage, the on-line services will utilize special numbers that can be reached from each point of the country for the cost of a local phone call. For example, in Germany, Europe Online plans to use Deutsche Telekom's Datex P/X.25 service numbers, which can be reached from all big cities using a single number.
The a
ccess speed is just as important as the number of access numbers. AOL is leading its rivals. The company said that it will start from scratch with 28.8-Kbps access in all its covered European countries. MSN and Europe Online started service with 14.4- and 9.6-Kbps speeds, respectively. CompuServe recently introduced 28.8-Kbps access in major European cities, but the bulk of its access is 14.4 Kbps.
Although the U.K., France, and Germany have localized services, they will be able to tap the information sources provided for their neighbors. AOL, for example, offers localized home pages, with buttons to change to the sections of other European countries or the U.S. Europe Online customers also have a local welcome page that lets them change to other sections. Additionally, they will be able to join a section dealing with international issues in English. MSN offers its international members log-on screens in local languages, from where they can enter the localized-content areas.
The competition betwee
n on-line services in Germany, France, and the UK is expected to intensify this year, and it's starting to spread to other parts of Europe as well. Last summer, Russia Online (
http://www.online.ru/
) was launched to give Russians full access to the Internet for $35 a month plus a setup fee of $50. And some local European carriers are expected to convert their older text-based services to modern GUI-based systems. Apple's eWorld is expected to enter the race with a Windows version of its current Mac-based access software and localized services for Europe. Subscribers will only benefit from this increased competition.
An On-Line Battle for Turf
