No such thing as a free phone

You're on the phone, talking to a friend, when a jingle interrupts and a high-pitched voice urges you to visit your local supermarket or apply for a loan. The ad lasts only 10 seconds, but new ads cut you off every three minutes. At the end of the call you press a button to hear more about the products advertised.

This is Gratistelefon, a Swedish telephone service that offers free calls to anyone willing to endure conversations with commercial breaks. You may think it horrifying that the phone, one of life's few remaining ad- free zones, has finally been invaded by advertisers. But just as people have learnt to live with ads on television, radio and the Internet, the Swedish public is getting used to ads on the phone. Gratistelefon, launched a few months ago, is already oversubscribed: 20,000 people use the service, with another 20,000 on a waiting list until the system can cope with the demand.

A third of subscribers are students, although Peter Broden, Gratistelefon's marketing director, says the service is not used only by students and people on low incomes. The average age of a user is 35, and half of the subscribers are employed. Businesses, not surprisingly, are not keen on the idea.

My conversation with Peter Broden is a faltering one. Every three minutes a bleep warns us that we're about to be cut off by an ad. We both hear different ads, which becomes a topic of conversation ("What did you get, then?"). He explains that the ads are geographically targeted, which is why advertisers love the service. A shop or cinema knows that its ad is being heard only by people in that postal area.

The ads can also be aired in selected time slots. "If a local cinema wants to tell people that a particular film is showing at 8pm, they can have the ad aired between 6pm and 8pm that day," Broden says. Gratistelefon has profiles of all its subscribers and in future is planning to target users even more precisely. "We know which are households with lots of people, single households, what they do and how old they are. So people will get ads specifically aimed at them," Broden adds.

Advertisers also love the idea, partly because, unlike TV advertising, it gives them a captive audience. "It's only 10 seconds, so unless you're superman, there's no time to go to the bathroom," says Broden. Gratistelefon is also a relatively cheap way for businesses to target advertising. They pay a set rate for every ad listened to, which is significantly cheaper than direct mail. The interactivity of the service may soon be increased, so by pressing a button callers will be connected directly to the company advertising its goods or services.

At the moment, the maximum length of a free call is 30 minutes, although this will be extended when Gratistelefon can cope with the demand. If advertisers are willing to pay higher costs, free calls will also be offered on mobile phones and for international calls.

Broden says that people aren't driven insane by the interruptions because they have subscribed to the service and have already decided they are willing to put up with it. "It's not as if we're imposing it on anyone," he says. But what about non-subscribers, people being called by their penny-pinching friends, on whom the ads are being targeted? Broden says that his friends tend to be polite because they know it's his company.

Maybe the Swedes are just more patient than the rest of us? Peter Broden thinks not. Gratistelefon is currently negotiating with telecoms companies all round the world that want to license the idea and use its software. Including Britain? Yes, Broden confirms, though he refuses to elaborate.