Is the Business of Internet Access Provision Right for You?

The Communications Technology Revolution is proving to be more important and more pervasive than even the Industrial Revolution that preceded it. It is in fact driving every aspect of the emerging global economy and is certain to be the most significant development in the history of human economic endeavor. There is no doubt that this presents virtually limitless opportunities for astute individuals and organizations to profit from offering these new communications services to a voracious and largely, as yet, untapped market.

It is not however self-evident that anyone who goes into the Internet business will make an instant fortune connecting millions of eager users to the Information Superhighway. While there is gold in the Internet, it is not just lying around on the surface waiting to be harvested. This is a volatile, highly dynamic, and fiercely competitive industry. In fact what appears to be a nugget just lying on the ground, upon closer inspection, frequently proves to be a land mine. Hence the Internet Access business is neither for the timid nor the greedy.

The question is whether the Internet Access business is right for you. Listed below are fourteen questions that should help you make that determination.

1. What is your existing business?

If you are currently in the telecommunications, cable TV, wireless communications, or utility industries, then a strategic entrance into the Internet Access business is essential for your continued survival. Conversely, if you are an insurance marketing firm or a restaurateur then you must ask yourself how your current business experience is going to prepare you for the chaotic world of telecom.

2. Why do you want to be an Internet access provider?

If you are currently in the communications or the network services industry and you want to bundle Internet Access services to your existing suite of services, then you are probably a good candidate to become an Internet Access Provider. If however you have $100,000 and are looking for a speculative investment, go to the NYSE and purchase Internet related stocks. They will in the long run make you far more money and cause you far less heartache than staring your own Internet Access business.

3. To whom do you want to provide Internet access?

Do you want to provide PPP dial up access for personal users or do you want to focus on commercial business access provision, or both? Do you want to take a mass marketing approach to Internet Access Provision, or do you want to focus on adding it to the services you are currently offering to your existing client base? The first approach is viable but is intensely competitive and requires a substantial commitment to marketing in order to gain a significant enough market share to be sustainable. The second approach does not offer the huge profit potential of the first option, but it is significantly more attainable and presents far less risk.

4. In what geographical region do you want to offer Internet access?

Internet Access Providers are popping up all over the world. Most are small independents offering services from a single point of presence to users within a local dialing area. Others are putting up switches in multiple urban centers simultaneously in order to offer nationwide Internet Access to their clients. Most of the prime urban markets already have multiple access providers, and sustainability of a mass marketing approach to theses areas is difficult without having significant market share in more than one region. However there are still tremendous opportunities available to provide services to smaller communities and to people in rural areas. There are also substantial benefits to adding Internet Access to your existing suite of services even if you are operating in an area where there are numerous commercial providers.

5. How much Internet Access do you want to provide?

Internet Access comes in different sizes. Typically an Internet Access Provider leases a T1 line from a telephone or cable company and then resells that bandwidth in smaller increments. Some providers just offer PPP access rates, others offer a combination of PPP and ISDN rates. Some of the larger providers purchase or lease multiple T3 and DS3 size lines and in turn lease T1 lines to other Internet Access Providers. Different scales of access provision are substantially different businesses. It is important to know which level of Internet Access Provision is right for you.

6. Do you intend to offer user training and Internet business consulting?

Individuals and businesses that want Internet expect their Internet Access Provider teach them how to use this new medium. Companies are going to need consulting on how the implications of Internet communication are going to change the ways they define and perform their existing business. If you offer high quality bandwidth services, you will find that informed users are effective and contented. Conversely untrained users will make mistakes and then hold you accountable for their difficulties. Because of the costs associated with developing high quality, highly dynamic training curriculum, and because of the specialized communication skills required for competent Internet instruction, it is generally better to outsource these services to competent specialists and bundle them into your suite of services.

7. Do you intend to offer users telephone technical support?

Once an Internet Access Provider's client base reaches significant mass, the incoming calls from new users experiencing difficulty becomes overwhelming. It is necessary to make provisions to provide sustainable telephone technical support, or your clients will become frustrated and change service providers. From a quality control perspective, this service is probably best done in house, although there are companies that specialize in offering telephone technical support services.

8. Do you intend to offer network systems integration services?

Once they have made the decision to come to the Internet, many organizations find that they now have to redesign their existing network in order to maximize their potential Internet utilization. For some companies this presents a significant obstacle to getting connected. If you can offer turnkey solutions to these problems, it will enable you to secure substantially more business.

9. Do you intend to sell hardware?

The demands of multimedia computing on the Internet is now driving hardware upgrades throughout both the personal and the business computing marketplace. This presents you with opportunities to offer your connectivity clients the hardware and software they are going to need. The down side to selling hardware is that it may be perceived as a conflict of interests, and as such this could undermine your credibility in the areas of consulting and systems integration.

10. Do you intend to offer World Wide Web development services?

The only thing growing faster than the Internet is the World Wide Web. Indeed it is the Web and its multimedia applications that is generating most of the current interest in the Internet. World Wide Web developments is a very different business than access provision. It requires copy writers, graphic artists, researchers, programmers, link marketers and a host of other media professionals. While it seems that everyone with a modem has recently hung up a shingle and pronounced themselves Web developers, quality online multimedia development is a tremendously demanding and complicated process. It requires an exhaustive degree of communication with the client that only increases as the clients site grows. If you are not already a Web development firm, it is probably best for you to seek out a qualified independent developer and enter a joint marketing arrangement.

11. How long do you intend to be in this industry?

Many speculators are coming to the Internet Access Provision business with the intention of building up a large client base over a two year period and then selling their point of presence to a larger access provider. Others are developing both small and large scale models of Internet access provision that will be sustainable for the long haul. Knowing what you want out of this business, and how long it is going to take you to achieve it, is critical to success in the Internet Access Provision industry.

12. How much capital are you willing to commit to this venture?

Internet Access Provision is a capital intensive venture. Quality hardware and bandwidth cost money. The more successful your business, the faster it will grow. On the Internet fast is real fast, and that means constant upgrade costs and constant increase in personnel and marketing costs. It is important to have enough capital on hand to meet the potential voracious appetite of this business. Internet Access Provision can provide enough cash flow to make these costs sustainable, but if the capital is not readily available when it is time to upgrade, you will not be able to continue to satisfy your existing client base, let alone increase it.

13. Are you prepared for the potential regulatory implications of being an Internet Access Provider?

The communications technology revolution is sending shock waves through the traditional telecommunications regulatory bodies. Legislatures and regulatory agencies all over the world are scrambling to respond to the implications of these ever evolving technologies. In many cases people who neither use the Internet not understand it are feverishly passing laws in attempts to pander to their equally ignorant constituencies. While the Internet has up to now been relatively self regulating, this is changing rapidly and Internet access providers will certainly begin to face a maze of regulatory restrictions concerning content, user activity monitoring and rate setting. If you find dealing with these constantly changing regulatory expectations daunting, then Internet Access Provision may not be the right business for you.

14. What strategy do you have for survival in a marketplace that includes companies like AT&T, MCI, and the local Bells, as well as a host of other players from the cable TV and utility industries to the traditional major media providers?

Virtually every multinational media provider and telco is currently spending billions of dollars investing in bandwidth provision infrastructure. It is likely that the Internet Access Provision industry will to some extent begin to resemble the long distance provision industry. There are over two thousand successful long distance service providers in the United States, yet over 90% of the market share is held by ATT, MCI, and Sprint. If you intend to survive the cut, you must have an effective strategy to define your market segment in an industry populated by giants.

These are not merely fourteen questions about Internet Access Provision, nor is this some a la carte menu from which you can pick and choose what seems relevant to you. Unless you are prepared to clearly and concisely answer all of these questions, Internet Access Provision is not only not the right venture for you, it could be disastrous.

If, however, you do have satisfactory answers to these questions, then you are fortunate enough to find yourself with a golden opportunity to provide the mostly highly desirable commodity of the coming global economy. There are profits to be made at all levels of Internet Access Provision, from providing commercial dial up accounts, to providing high bandwidth access, as well as more customized suites of services. For those organizations that are ready to commit to quality and service in a dynamic environment, the future could hardly be brighter.

If this approach to Internet Access Provision makes sense to you, and you are ready to bring your company into the world of Internet Access Provision for the 21st century, then contact an ICIR representative at 210.828.9964, or email us to get started with your venture. For further information about ICIR's Internet business consulting, training, link marketing, WWW development and systems integration services click here.