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Attacked by telcos, Netcom fights back

Internet access provider Netcom will launch new personal services tomorrow to combat recent competitive pressure from the telcos.

    Internet access provider Netcom will launch a new menu of personal services tomorrow to combat competitive pressure from the telcos that have recently stepped onto its turf.

    The new service, called Netcomplete, will provide content similar to that offered by online services like America Online and CompuServe, according to Netcom officials. Combining the company's personal and business services, Netcomplete will include personalized news, a personal portfolio, and an online encyclopedia.

    Netcom also signed licensing agreements with Netscape Communications and Microsoft to let its subscribers choose between the Navigator and Explorer browsers.

    Last week, Netcom announced that it has reached 400,000 subscribers, 83,500 of whom signed up during the first quarter of 1996. Nonetheless, as AT&T, MCI, and Bell Atlantic all ramp up their recently announced Internet services, Netcom will be hard-pressed to match their marketing muscle and maintain its position as largest Internet service provider.

    Analysts say Netcom will pull out of the race to sign up novices and instead focus on experienced Net users who are online more often and for longer periods of time. The new services provide content aimed at these veterans.

    "All the Internet access companies have to come up with a response with the entrance of the giants, and it's got to be a strategy that feeds the new users to AT&T because that's a losing battle," said Adam Schoenfeld, an analyst with Jupiter Communications.

    Although Netcom is matching AT&T's and MCI's $19.95 flat-rate monthly fee for unlimited access, Schoenfeld and others speculate that Netcom will still have difficulty surviving if the telcos start a price war. "What will companies like Netcom do in a heightened price war? What if AT&T lowers its price to $10.95 per month?" he asked. "That might wipe out any strategy they can ever undertake."

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