M-Web has cut access to its portal services - including mweb.co.za, News24.com, SuperSport and M-Net - to all dial-in users that do not access the Internet through the M-Web Internet service provider (ISP).
The closure of the portals was implemented this week, although M-Web says it has been restricting certain services and content on its sites since April last year.
M-Web`s move comes shortly after the Absa Group opened its own free ISP, which has already garnered 50 000 users.
Absa sees the closure of the portals to its customers as an affront.
"The timing and nature of M-Web`s decision suggests they perceive Absa`s free Internet service or any Internet service as a threat," comments Santie Botha, Absa Group executive director. "It is the public at large who will suffer because of this blatant attempt to intimidate their customers."
M-Web says it decided on the course of action as it believes the business model of giving away content and services for free cannot work. Russel Yeo, GM of M-Web Studios, says the idea that this kind of model could work is "ridiculous".
"That [concept] died April last year. Free media can only survive in a highly regulated environment, like radio, and in high-value niche markets." He cites AOL`s model of paid-for content, as well as M-Net`s model of paid-for television content, as examples of successful pay-only content access.
Absa disagrees. "It is truly unfortunate that M-Web has resorted to such a short-sighted and limiting business tactic," says Botha. "M-Web`s decision certainly goes against the spirit of our free service."
Yeo says that although content, services and special offers will be limited to M-Web subscribers only, "we`re not stopping anyone from accessing anyone else - we are not blocking e-mail or shopping facilities".
M-Web says it has not seen an increase in cancellations due to Absa`s free Internet offering. "Cancellations are not out of the ordinary."
M-Web estimates that it holds about 70% of the South African dial-up market, and Yeo believes Absa`s user figures - now sitting at 50 000 - could be inflated, as many who have tried the service may not be using it actively.
If M-Web does hold 70% market share, it could fall foul of the Competitions Act of 1998, which states that the dominant firm is prohibited from engaging in acts "requiring or inducing a supplier or customer to not deal with a competitor".
"I don`t think that we are acting in an anti-competitive way," responds Yeo.
Business Day reports today that competing ISP, XSINet, accused Absa of "unethical tactics", as Absa tellers were trying to induce XSINet customers to change over to Absa`s ISP when paying their XSINet registration fees.
In a test performed by ITWeb this morning, the M-Web portals were inaccessible from Absa dial-in accounts, but were accessible from ZANet, Icon and M-Web dial-in accounts, and also accessible over the UUNet network.
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