263.net Ends Free E-mail Service to 20 Million Users

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Last updated at: (Beijing Time) Wednesday, March 20, 2002

263.net Ends Free E-mail Service to 20 Million Users

Twenty million e-mail users of 263.net learned on Tuesday that their free service will end in two months. The Internet company is following in the footsteps of Sina and Netease, which started charging their users last year. The free service will end on May 21, the company said.

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Twenty million e-mail users of 263.net learned on Tuesday that their free service will end in two months.

The Internet company is following in the footsteps of Sina and Netease, which started charging their users last year.

Users : ending free service is not good

"This is bad news for me," said Xi Shuhua, a 263.net e-mail user. "I have used this e-mail for five years to keep in touch with my friends at home and abroad. It will be a headache for me to change my e-mail account."

The free service will end on May 21, the company said.

263.net president : paid email is global trend

Huang Mingsheng, president of 263.net, defended the act, saying that paid e-mail is a global trend and is a must to accommodate users who want safer and upgraded services. 263.net was the first Chinese website to provide a free e-mail service.

Will this action turn 263.net users away?

But Li Zijun, another grumbled user, said 263.net's decision to charge may hurt its reputation among net users.

"The company's image will be tainted since it promised to offer free e-mail for a long time," he said.

Nathan Midler, an Internet analyst at International Data Corp in Beijing, also said 263.net's move is risky.

"There are lots of websites out there offering free e-mail accounts, and the decision will turn many 263.net users away," Milder said.

Duncan Clark, an Internet analyst from BDA China business consultants in Beijing, said the decision to charge e-mail users reflects the poor state of the online advertising market.

Chinese Internet firms are still licking the wounds of a cyber downturn in late 2000.

Capital sources are squeezing down, and Internet firms have yet to turn big profits.

Other Internet companies follow suit

To stay financially viable, Internet companies like Sina, 163, 263 and 21cn began charging Internet users for e-mail usage last year.

For example, 163.net, a mainland arm of Hong Kong-based Tom.com, charged between 50 yuan and 120 yuan (US$6 to US$14.50) a year, and promised advanced technology to guard against junk mail and viruses.

Internet analyst Fang Xingdong said that free e-mail has been the main driving force behind the growth in Internet businesses and that 263.net's move may therefore not bode well for the Internet industry.

China had more than 30 million Internet users at the end of last year. Official statistics show that for every user, there are 2.2 e-mail accounts and 6.8 items of mail sent out every day.

Although Internet users in China on the whole are not used to paying to send and receive e-mail, customers like Chen Hong are not too put off.

Chen said she has used 263.net since 1997 and will now pay 50 yuan (US$6) because she thinks it is an affordable fee.

But Guan Jing, another 263.net e-mail user, said he will defect to a foreign website.

Guan said compared with international Internet gurus, Chinese domestic e-mail providers do not pay enough attention to customer service.

Free Mail vs. Paid Mail: Competition in Chinese Email Market

Chinese email users, who have been accustomed to receive free online services, are grumbling over some email service providers' recent decision to charge for Internet use.

NASDAQ-listed Sina.com announced on August 16 it would reduce its email carrying capacity from 50 MB to 5 MB, and begin to charge new mailbox subscribers. Full Story

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