The popular belief that UK users pay more for their internet connection than their US counterparts has been blasted by a study published yesterday by telco watchdog Oftel.

This latest benchmark report, which compared worldwide internet charges throughout February 2001, revealed unmetered dialup internet access is actually cheaper here than in California and Germany.

"With the introduction of unmetered tariffs which are now widespread in the UK, internet access is cheaper here than a number of countries," said Oftel chairman David Edmonds. "UK consumers continue to get a good deal for key telecom services."

UK unmetered internet access packages cost on average £18 a month - one pound cheaper than the cost incurred by US users and £21 cheaper than German users.

Mobile phone costs work out cheaper too, with average costs of around £12 a month compared to £16 in France and £18 in Italy.

David Edmonds believes Oftel's work has pushed prices down for consumers. It seems there's some truth in this: launched its £9.99-a-month unmetered package yesterday. Every monthly payment includes a £2 donation to charity.

The company describes itself as a 'charity revenue generator' and insists it is still making a profit at this price. But it was not willing to reveal how it did so, nor which ISP it is using.

"We have received private investment from people who believe in the concept. We are not making a loss," said a spokesperson for

"I see no reason why other companies can't do it. They just choose not to," said John Ager, the company's executive chairman. "But how we [afford to] do it is part of the secret." The price undercuts some of the UK's biggest and more established ISPs.

"Some people may write us off as a small minnow in a large pond, but we are ready and able to take on the more established ISPs." said Ager. "We are offering this price because we can afford to do so. There is no need for us to charge of over the odds just because this is what our competitors are doing."

The service will initially only be available to 10,000 users, but plans for expansion are in place.