Wanadoo clearly demonstrated that the Internet is indeed a reality

Nicolas Dufourcq Wanadoo chief executive

The company said it expected to post a profit before interest, tax, depreciation and amortization this year.

The number of subscribers to the firm's services increased by 150% to six million last year, and Wanadoo said it was aiming to have 10 million clients by the end of 2003.

The figures, which came the same day that the e-tailer Amazon revealed it had broken into profit, represent a boost for an industry still struggling to convince investors of its growth potential.

"In a year that saw markets question the future of the internet, Wanadoo clearly demonstrated that the Internet is indeed a reality," chairman and chief executive Nicolas Dufourcq said.

Online directories

Wanadoo draws revenues from internet access charges, e-commerce and directory services.

The market will be especially pleased about an increase in Freeserve's customers, reflecting its renewed focus on customer growth

Dresdner Kleinwort Wasserstein

Commercial telephone directory, Les Pages Jeunes, owned by Wanadoo provides access to directory information in 23 countries.

Last year the services responded to more than 75 million requests and generated revenues of approximately 15 million euros.

Overall directories and business services of the company account for nearly one-third of all the advertisers on the internet.

Customer growth

Wanadoo has subscribers in France, where its share of the market is more than 60%, in the UK, the Netherlands, Belgium and Spain.

Doubling the Freeserve network capacity created a solid platform on which to go out after the summer and win new customers once again

John Pluthero Freeserve boss

In Britain, the company's subsidiary Freeserve announced that it has strengthened its position as the UK's market leading ISP with renewed momentum in subscriber growth.

The number of registered accounts increased by 13% on a like-for-like basis to 2.3 million over the year to 31 December.

"Doubling the Freeserve network capacity in the first half of 2001 created a solid platform on which to go out after the summer and win new customers once again," said Freeserve's chief executive John Pluthero.

Analysts at Dresdner Kleinwort Wasserstein said: "The market will be especially pleased about an increase in Freeserve's customers, reflecting Freeserve's renewed focus on customer growth."

Expansion plans

Wanadoo has plans to expand its activity in Europe further, but only in the countries it already operates, Mr Dufourcq said.

The subscribers it has are also increasingly moving away to packages offering faster internet access and away from the free basic service, the company said.

Wanadoo had 545,000 broadband subscribers in Europe at the end of December, compared with 143,000 subscribers a year earlier.

Revenue

As online advertising has fallen short of expectations, the entire industry has been scrambling for alternative revenue sources.

Analysts have predicted that ISPs that cannot get their customers to pay for content and services will not survive.

Europe's largest ISP, German T-Online, began charging for high-quality and broadband content this year in a move to reduce its dependence on low-margin fees for internet access.

In December, Europe's anti-trust regulator opened an investigation into Wanadoo's prices, looking into whether the company undercuts competitors by charging less than it costs to provide the services.