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GTE rolls slowly into the Net

GTE introduces a new offering in its consumer Internet strategy, a free Web-based email service in conjunction with the New York-based iName.

GTE unveiled a new offering in its consumer Internet strategy today, announcing it would offer free Web-based email in conjunction with the New York-based iName.

In a conference call with reporters, GTE executives introduced the service as a way to extend its reach to Internet users worldwide.

"We believe we are becoming a one-stop telecommunications company," said Michael Bolduc, director of product management for GTE.net, the company's consumer and small business ISP.

"A year ago, we asked ourselves what it would take to get people to believe in the Internet experience," Bolduc added. The answer the company settled on was email, he said.

What may be most striking than the offer itself is the fact that it took the company a full year to roll it out, setting itself far behind in a market where established players like Hotmail and Yahoo have already garnered millions of users.

But that timetable has been characteristic of the big telephone companies' move online, analysts said.

"It's definitely typical of the glacial speed at which the telcos are moving towards the Internet and towards making it a part of their offerings," said Abhi Chaki, a senior analyst at research firm Jupiter Communications.

"It's part of the telcos coming late to the game in the Internet," agreed Forrester Research senior analyst David Cooperstein. "They've been dealing with mergers and getting into long distance. The Internet kind of went by them the first time, and now they're stepping over each other to get into the business."

Bolduc said the company initially struggled with trying to do the Web mail program internally, but ultimately decided to contract out for the service

The contract with iName will initially extend for one year, GTE officials said. The phone company will not pay iName for mailbox space, but iName will keep ad revenue that results from the deal.

Bolduc also said the company would have further consumer announcements in the near future, ranging from low-cost access plans to devices allowing users to check their e-mail over the phone.

GTE recently said it would sell about $3 billion worth of assets, including close to 1.6 million phone lines, in an effort to transform itself into a full-service telecommunications company. Much of the proceeds would be applied to fast-growing segments of its business such as data transmission and Internet services.

But the company's future depends on regulators' approval of its proposed merger with Bell Atlantic. Critics have said the merger would concentrate too much power over local phone lines in the new companies hands, and some Federal Communications Commission officials have said they are skeptical of whether it would benefit consumers at all.

Even with these distractions, Cooperstein said GTE and other telephone companies have started to pick up the pace, slowly packaging Internet services with voice offerings, and picking up the pace of their high-speed DSL access rollout.

"They're thinking of the consumer not just as a buyer of voice services, but as a buyer of telecommunications services now," Cooperstein said. "It's something they're starting to get religion around."