According to survey findings published by the Pew Research Center, over 73% of households in the U.S have access to one form of broadband internet connection or another.
How satisfied they are with that ISP is a whole different matter.
And the fact that most people are not that satisfied with their internet service provider (ISP) is nothing new. Findings by the FCC demonstrated that up to 38% of home internet users changed service providers for one reason or another in the three years prior to the study. The two main reasons for these changes were:
- Price of service provided
- Performance of service provided
From slow speeds to extensive downtime and exploitative early termination fees, people do not like feeling beholden to their internet service provider any more than they do their airlines.
Perhaps the fact that there has been a significantly slower adoption of traditional broadband services in recent times is a testament to how much people typically abhor their ISPs across the globe.
A huge chunk of Americans, and indeed the world’s population, now use their smartphones as their primary internet source at home. At least one out of ten American adults use ONLY their smartphones as their preferred point of access to the internet.
What Does This Mean to the Entrepreneur?
It means there is a considerable gap in the ISP business niche.
If you can find a way to provide people with high-speed internet and reliable, affordable broadband, there is a huge market out there ready for the taking.
As price and performance are the two main complaints — if you can sort these issues out for people, then you can capture that market.
- How to Start Your Own ISP
- What is a WISP?
- A Step-by-Step Guide on How to Set Up Your Own WISP
- Getting Started with Your ISP or WISP Business
How to Start Your Own ISP
Are you now wondering why more people don’t join in and start their own ISP business? After all, it seems like a no-brainer considering how much potential for returns this market niche has.
Well, it only takes a few minutes of looking through customer complaints about ISPs online to realize that most areas are being monopolized by their ISPs.
This tweet is a good example of that:
I hate .@CoxCalifornia internet because they can’t fix my dropping signal. A tech came out, said it was fixed and bailed before testing. It’s not fixed. I also hate them because they’re the monopoly ISP in my area so I literally have 0 choice.
— shaneofthedead (@shaneofthedead) February 24, 2018
So what’s the main issue?
To start with, you will need a slew of government permits to even think about laying down fiber-optic cable to start providing internet to any region. And doing so ultimately costs a lot of money, manpower, and requires a lot of time before you can turn a profit.
You will need:
- To buy internet capacity from reliable transit providers
- Investors who are willing to put in a lot of money and wait years before they see any meaningful returns
- Aggressive marketing to take a massive chunk of the market from the incumbent provider
- A colossal team of staff to deal with all the customer complaints and issues
- An army of lawyers to protect the company from frivolous lawsuits meant to put you out of business
To illustrate just how big of an undertaking this is, Google Fiber cost an estimated $84 million to connect 146,000 homes in Kansas City and an estimated $11 billion to go nationwide.
It is no wonder, then, that the project slowed down.
What Options Are Available to Small Business Owners?
It is logical to assume that $11 billion or even $84 million are not practical figures for small business owners who want to start an ISP. It is, therefore, imperative to find an alternative to the “laying down of fiber” route, and this is why small business owners should consider setting up a WISP instead.
What is a WISP?
Also referred to as “fixed wireless networks,” a WISP is really just an ISP that uses wireless internet technology to provide reliable internet service plans to businesses or homes. With the right kind of technological setup, a WISP can provide its customers with high-speed internet connections of up to 150Mbps.
The best part?
All this can be done at very competitive rates.
Your typical WISP network architecture would look something like this:
- A reliable high-speed fiber connection: You would need to connect to a reliable high-speed fiber connection that terminated at a commercial building or data center which acts as a relay center with wireless internet access points and backhauls.
- Relay sites: Connected to the fiber-optic cable connection using PtP (point-to-point) wireless backhauls, these relay centers will be strategically placed on a variety of structures, including commercial buildings. This extends the reach of the wireless network provided by your WISP.
- Customers: Your customers will have equipment installed on their rooftops that will help them connect wirelessly to access points on your relay sites (customers are typically configured to connect to one specific relay site which guarantees a stable connection).
With this kind of connection, a WISP is more reliable than a city-wide Wi-Fi connection that tends to drop or dip when encumbered by walls, buildings, and even the weather.
What Are the Costs Involved in Setting Up a WISP?
|Fiber+Access Point Location||$2,315.00||$5,475.00||1||$2,315.00||$5,475.00|
|Toolkits (1 per install technician)||$9,949.00||$0.00||1||$9,949.00||$0.00|
A Step-by-Step Guide on How to Set Up Your Own WISP
Apart from the costs, which are considerably lower than setting up a fiber-based network, there are other things that you should consider before deciding to jump in.
- Evaluate your area — are there are lot of customers eager for a new alternative?
- Find a fiber provider — ironically, you will have a partner with one of your competitors
- Find excellent relay sites — figure out how to get your signal directly to your customers
- Get all your paperwork in order — this is a business and you need to follow the law
- Build your infrastructure — the first thing you think about is the last thing you work on
Here is more detail about each of these steps:
1. Evaluate Your Area
There are certain characteristics a region must have to make it feasibly viable to host a successful WISP business. You should evaluate:
- Viable relay sites: To get the best service, your customers must have a direct line of sight with their dedicated relay site. You can use radio towers, water tanks, buildings, and even homes. Be sure that the region offers plenty of options when it comes to relaying sites because they will make or break your business.
- Economically feasible home density: The best locations for WISPs tend to be suburbs because they have enough low-lying houses with enough residents to make this business model profitable. For example, cities have tall buildings that create issues with relay sites, while rural areas do not have enough homes clustered together to facilitate efficient use of access point towers.
- Types of houses/roofs: The roofs you are dealing with will determine how difficult or easy it is to install the needed equipment. This issue is often easy to solve by hiring different technicians who are comfortable with varying roof setups.
- Area topography: Again, a line of sight issue will arise with hilly locations. Low-lying plains are usually best but that does not mean you cannot build a WISP business in other locations — it will just require more specific expertise and may cost a little more.
- Fiber availability: You will need to find reliable broadband internet providers. Preferably, you should find a building that already has an excellent fiber connection so you do not have to pay for trenching. But you can also get a Dedicated Internet Access and rent space from a data center for your equipment.
- Competition: Find a location where people are not happy with the ISP and you will have a much higher chance of penetrating the market.
Once you find that all this is viable, then the next step is to find a reliable fiber provider.
2. Find a Fiber Provider
You should know that you are probably going to have to buy a fiber connection from the very same company that you will compete with to get residential or commercial customers. Do your research and see who is the best and most reliable in your area. You need a fiber provider who is:
- Reasonably priced
- Has reliable service
- Close enough to your intended customer base to provide excellent relay site mapping
- Already built into buildings in the region, so you do not pay expensive trenching fees
Look at the office buildings around that area and find out who they are mostly using. This is often a clear indication of how reliable and well-connected that fiber provider is in the region.
3. Find Excellent Relay Sites
Excellent relay sites have the following qualities:
- A clear line of sight from your relay sites to your fiber connection
- A clear line of sight from your relay sites to customer homes
- Easy access to AC power (rooftops normally aren’t set up for this and, as such, might require additional financial input from you)
- A place where you can securely mount your equipment
- 24/7 access to your maintenance and installation crew
You can easily identify excellent relay sites by either using Google Maps Pro, driving around to try and see which locations provide the best line of sight, or fly a drone around at rooftop level and review the footage for best possible relay sites.
4. Get All Your Paperwork in Order
Depending on where you are operating, you will need to get permits and licenses for your business. One of the most important papers you will have to acquire is the FORM 477 from the FCC. This form is used to determine which ISPs provide service to which areas.
5. Build Your Infrastructure
This will include coming up with everything you will need to run a successful WISP business that your customers will enjoy. Things you should consider here include:
- Finding the right hardware platform: Your hardware needs to be of high enough quality to withstand the test of time, weather, and the energy demands it will experience from your clients. Some of the best access point and CPE device manufacturers include Ubiquiti, MikroTik, SAF, and DDB Unlimited.
- Network topology: This is where you map out which of your customers will connect to which relay site by region or neighborhood.
- Billing and customer management: As you grow, you will need an automated way of doing this to make sure everything runs smoothly. This will ensure you do not end up being yet another ISP that is despised by its customers.
- Install your first customer: You should be your first customer. Try out the system to ensure that it works before rolling out your marketing campaign.
After that, all you will need to do is run an aggressive marketing campaign which undercuts your competitors’ prices and provides a far superior and much more reliable service. Maintenance, customer complaints, and acquisition all have to be treated equally. Do not only focus on customer acquisition unless you can actually service all those that come onboard.
Getting Started with Your ISP or WISP Business
It’s clear that setting up your own ISP or WISP company is a great way to start making some decent money. The route you go down just depends on your budget and time.
ISP-based services are great (you won’t need to rely on other providers to offer your service), but as we’ve seen, they’re incredibly pricey to get off the ground. Therefore, if you haven’t got a million-dollar budget, or want to test the water first, setting up a WISP may be the more feasible option.
Whichever you choose to do, with some in-depth research, careful planning, and the aforementioned tips, you should be well on your way to not only providing a profitable service to customers, but providing a friendly, reliable service that isn’t despised by all your customers. And this should give you a big advantage over other internet providers in the area.