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How to Start Internet Service Provider Business?

how to start internet service provider business?
Posted on Jan 9, 2021

In this article, we help you understand how to start internet service provider business. An Internet Service Provider or ISP is a company that provides internet access. Every time you download a file or visit a webpage, your connection is routed through an ISP.

According to Service Providers: ASPs, ISPs, MSPs, and WSPs book written by Mary Helen Gillespie, internet service providers (ISPs) give customers the infrastructure, software, equipment, and services to create an Internet connection with reliable and scalable performance.

In addition to the Internet connection, they may provide access to the World Wide Web, USENET discussion groups, email, file transfer and IRC (Internet relay chat), voice, domain name services, hosting, Web development design, consulting, and e-commerce services.

Today’s technologies allow ISPs to connect customers to the Internet using various communications media, including wireless, satellite, and cable access.

Industry Outlook – Business Plan

The wide use of the Internet goes on its rapid expansion, especially in Web products and services. As the number of home and business users increases, the number of Internet service providers will rise as well. ISPs are divided into three categories:

Local: Most ISPs are local, serving one municipality, county, or small geographic area. According to Service Providers book, 80 percent of the ISPs surveyed in a study were local.

Regional: Regional ISPs are larger than local ISPs and serve more than one locality, but they are not national. Their customer can reach 10,000 or more.

The picture illustrates a small earth globe in blue color placed on the keyboard of a laptop.

National: National ISPs have multiple points of presence across the country, allowing unlimited internet connectivity for customers. Some smaller ISPs expand their service range by contracting to use the large ISPs’ point of presence.

The first thing in investigating how to start an isp business is knowing the importance of a comprehensive business plan. A business plan helps you achieve your business goals. A clear and convincing business plan will guide you through each step in developing your work.

You may think you do not need to write a business plan because some entrepreneurs have succeeded without it. They have developed successful businesses without having a business plan. But you should know that you are likely to fail without it. Does a business plan guarantee your success? Definitely not. But it will make the path to success easier and worth spending time and energy on.

How to start internet service provider business and prepare a business plan?

A business plan includes important things like your goals, the strategies you use, the potential problems you may face, solutions for those problems, the organizational structure, and the amount of needed funding.

in this picture a male technician is working in a telecommunication center on a laptop.

Potential Markets for ISP Business

Find out which market segment (local or global) needs your services. Guessing is not enough to find the answer; you must do intelligent research and analyze the available information obtained from the observations and investigations.

The Size Of The Business

It is important to determine the size of your market and the number of your customers. You cannot consider your primary target market as the entire population of the earth.

Determine Your Basic Needs

What do you need to get started? You need to make a list of them. Such as telecommunications systems and the equipment that employees need to perform their duties in the workplace. You should also consider the required time to prepare and run essentials.

Define Your Business

What are you going to do for others? How will your service improve your customers’ lives? Are they cheaper, safer, or more efficient?

This section should answer three basic questions:

  • Who are you?
  • What are you going to do?
  • Why are you different from your competitors?

Answering these questions is necessary for starting an internet service provider business.

Strategy

Once you identify your services’ competitive advantage, you will be able to choose the best strategy to achieve your goal. Think about your role as a manager or leader of a business. As you think about hiring and organizing your staff, you need to improve your passion or ability as a good boss.

Market strategies are the result of thorough market analysis. The market analysis allows you to become familiar with all aspects of the market to define your target market and sell. Then you can have a reasonable answer to this question:

how to start internet service provider business?

How to start internet service provider business? telecommunication racks, cables and ports in a server room.

Design A Marketing Plan

One of the common mistakes among entrepreneurs is not providing an accurate description of how to reach customers and introduce the product and services to them. Remember that it is crucial to answer the question of how to start internet service provider business.

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You can not convince potential investors, employees, and partners unless you provide them with efficient and research-based methods for communicating with consumers. You must reassure them that you can persuade them to buy your services once you reach potential customers.

How do you want to reach consumers? How do you convince them that your service provides more value than competitors? What advertising and marketing promotion strategies will you use?

Write Concisely And Useful

No matter who you write for, your plan should be short and useful. If you have additional valuable documents, consider them as attachments. Business plans should be concise for two reasons:

  1. It is much more practical and easier to read.
  2. Your business plan will be used to grow your business. So you will modify or use it repeatedly. You will never have the patience to modify and reuse it if it is not brief.

How does an ISP work?

The internet is a network consisting of many big and small interconnections worldwide. An ISP can provide Internet service to its users based on a telecommunication telephone line (such as copper or fiber optic cable), satellite, or wireless facilities. ISPs can be either privately owned or group owned.

Internet is nothing but a very large network that is made up of thousands of smaller interconnected networks. These networks have different protocols, and network components communicate with the protocol languages.

ISPs bridge the gap between users and the internet and provide the necessary technology for data transmission. ISPs can serve home users, small businesses, and large companies.

For example, a Dial-up internet service provider gave the users a user name, password, access phone number, and a modem to log on to the internet, browse the World Wide Web and send and receive the email.

ISPs also serve large companies, providing a connection from the company’s networks to the Internet. They are also called Internet access providers (IAPs). IAPs generally provide dial-up access through a modem and PPP connection.

However, companies that offer Internet access with other devices, such as cable or wireless connections, could also be considered IAPs. The terms IAP and ISP are often used interchangeably, though some people consider IAPs to be a subset of ISPs.

how to start internet service provider business

Types of network protocols

Several types of protocols play an important role in connecting different devices over the network. These protocols are:

  • TCP: Transmission Control Protocol
  • IP: Internet Protocol
  • UDP: User Datagram Protocol
  • POP: Post office Protocol
  • SMTP: Simple mail transport protocol
  • FTP: File Transfer Protocol
  • HTTP: HyperText Transfer Protocol
  • HTTPS: HyperText Transfer Protocol Secure
  • Telnet: Internet Protocol for communication with remote hosts and local data processing
  • Gopher: A communications protocol for distributing, searching, and retrieving documents on the Internet

Transmission Control Protocol

TCP is a popular communication protocol used to communicate across the network. This protocol splits the message into a set of packets that are sent from source to destination.

One of the basic terms in the digital world that we have all heard many times is the IP address. IP is the abbreviation for Internet Protocol and is a code or address assigned to devices connected to the Internet. IP is something like the postal system and allows addressing a package.

The IP protocol is designed as an addressing protocol. The IP address helps route packets through the various network nodes until they are transmitted to the destination system.

TCP/IP connects different hosts on the Internet and enables two hosts to exchange data streams and guarantee data delivery.

In the following section, we will know how to start internet service provider business.

How to Start Internet Service Provider Business

Today, the ISP market’s extent is characterized by a vast diversity of services and business connections. The constant progression of technologies and users’ needs have added to the complexity.

 

According to Start Your Own ISP website, there are ten steps for understanding how to start internet service provider business as a wireless ISP. Here, we will provide a summary of these stages.

  1. Area Evaluation.
  2. Find a Fiber Provider.
  3. Find Relay Sites.
  4. Pick a Hardware Platform.
  5. Billing and Customer Management.
  6. Network Topology.
  7. Build your Infrastructure.
  8. Install a Customer.
  9. Marketing.
  10. Maintenance.

How to Start Internet Service Provider Business? Area Evaluation

The first step of starting a internet service provider business is evaluating the area in which you want to establish your business. This area must be capable of providing the necessities for achieving your business goals as an ISP.

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starting a internet service provider business

Important indicators to evaluate:

  1. Usable Relay Sites: the wireless network is of relay sites where wireless APs will be installed, and your customers will connect to them. You will need a line of sight from the customer’s roof to your relay site, and it is not possible in areas with buildings or any physical obstacles.
  2. Home Density
  3. Types of houses: Some types of roofs are easier to work on. Make sure your team would be comfortable working on the rooftops.
  4. Topography: Topography is the arrangement of physical features in an area. As said before, you will need a line of sight from relay sites to each of the subscribers. So, regional characteristics like high buildings and hills can be very important in founding your sites.
  5. Fiber availability: You’ll need an upstream fiber-optic connection to get subscribers online. Finding a fiber connection is one of the most time-consuming steps of starting a internet service provider business as a WISP.
  6. Competition: If there are other ISPs in your area and customers are satisfied with their services, it will be so hard to persuade them to switch their service provider.

How to Start Internet Service Provider Business: Second Step

Surely you will need a public Internet connection. The best way is buying a fiber optic connection from an existing provider. These are some companies that provide leased fiber lines in the U.S.:

  • XO Communications
  • Zayo
  • Comcast
  • AT&T
  • Verizon
  • CenturyLink

the concept of internet network connection

Find Relay Sites

Make a list of relay sites in the area then you can start trying to negotiate with property owners. See here for further detailed information.

How to Start Internet Service Provider Business and Pick a Hardware Platform

Evaluate available options for wireless hardware. You will need an access point and CPE equipment. You can buy it from many manufacturers, for instance, Ubiquiti, Radwin, MikroTik, Bai Cells, Mimosa, Cambium,…

Billing and Customer Management

some software can help you run and manage your WISP business:

Ticketing: You can use a sound ticketing system to simplify your customer support process.  It reduces the amount of work, and you will focus on growing your business through fast and responsive customer service.

This system helps you automatically categorize, prioritize, and respond to tickets. (Ticketing Systems: osTicket, Zendesk)

Billing: Customers are usually billed a fixed rate per month. A software suite can perform automated billing, expired credit, late payments. (Billing Softwares: FreshBooks, Billmax)

Network Management: You need to monitor your network and know when it has problems. You have to know it to be able to fix it, and it will be useful if you do this before your customers call.

A pro network management suite can help you find out where your network needs upgrades. (Ticketing Systems: Zabbix, Nagios)

Technician on the telecommunication antenna tower

Network Topology

To know how to start internet service provider business, it is vital to understand how to build the network topology of routing and switching. Your network must be reliable and scalable. For further technical information, see here (+).

Build Infrastructure

Building Infrastructure includes building both fiber location and relay site. The installation process is similar, but relay sites are fed using a wireless backhaul, and fiber location by a fiber you purchased from a provider.

Install a Customer

This step is providing your customer with quality services.

Marketing

Marketing was formally defined by the American Association of Marketing Professors in 1935. it is the implementation of activities in the business that direct the flow of goods and services from producer to consumer. This definition may seem a bit old, but it reflects the value of marketing well.

The following brief definition is newer and was introduced in 2007 and was agreed upon after revision in 2013.

Marketing is the activity, set of institutions, communication creating process, delivery, and exchanging offerings that have value for customers, clients, society, and partners. It is essential for any business, especially ISPs.

Maintenance

It includes monitoring your network, upgrading it, troubleshooting, and weatherproofing.

How to Start Internet Service Provider Business: ISP Types

The United States has the most Internet Service Providers (ISPs) in the world. According to the CIA US has 7,000 ISPs. After America, Canada ranks #2 with 760 ISPs.

The ISPs are categorized based on the service type they provide to their customers. Different services have different speeds and have their own pros and cons.

  • Dial-up ISP: Those who use the Internet long ago remember this method and certainly have many memories of it. In this method, the Internet was provided through dialing and data transferred based on voice transferring protocols. Users needed a telephone line and a fax modem to access the Internet.
  • DSL: Digital Subscriber Line service delivers high-bandwidth information through copper cables. DSL is good for home users and small to medium-sized businesses.
  • Copper Cable ISP: This method utilizes copper cables and has been provided for many years by ISPs. ISPs use the copper medium for DSL or cable broadband by sending electrical pulses through a copper wire. It is affordable and accessible for home users, and most internet service providers will provide equipment like modems and routers.
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How to Start Internet Service Provider Business

  • Fiber optic ISP: Fiber optics is a transmission medium that uses instead of electrical signals. As you know, copper cables use electric signals. Fiber optic cables transmit data at light speed! The method of FTTH internet access is unfamiliar even to those who use it.
    The fiber internet method is nothing but providing the internet through fiber optics. FTTH internet receivers must have fiber optic cabling from the telecommunications center to their location and an FTTH modem.
  • Wireless ISP: You need no cable or wiring to provide an internet connection. In this method, the Internet is propagated through waves and can be received up to a specific range from BTS.

how to start internet service provider business

  • Satellite ISP: The waves are sent via satellite, and the user must use special equipment, i.e., the dish and the receiver of the waves, to receive it. Satellite signals are different types of media. Knowing all media types helps give you a broader understanding of how to start internet service provider business.
    People who live in farms, deserts, and mountainous areas use satellite internet service. Although satellite internet doesn’t have as much speed as other types, it is the right choice for many areas.

Terms Related to ISP – How to Start Internet Service Provider Business

Modems

Every computer needs a modem to connects to the internet. The modem is an abbreviation of the full form of modulator and demodulator. It modulates the information, converts it into an appropriate format, depending on transmission media, and then passes on data signal to the ISP.

FTTH

Fiber To The Home (FTTH) is a fiber optic internet architecture that provides fiber optic cabling to users’ homes or offices. We recommend you to read Fiber Internet How It Works.

You can learn FTTX network architecture and its required equipment in this article.

VOIP

In short, VOIP or voice over IP is the technology of voice transmission over the network which provides making calls. The human voice is an analog signal.

Therefore, an analog-to-digital signal converter is used to convert data packets over the IP network.

Backbone Provider

A backbone provider provides high-speed data transmission lines and other related infrastructure.

An ISP offers internet connectivity to users; a backbone provider offers the ISP with high-speed and high-bandwidth connection to the internet.

FAQ: How To Start Internet Service Provider Business

What is Form 477?

All facilities-based broadband providers are needed to file data with the Federal Communications Commission 2 times in a year with form 477 on where they provide internet at speeds exceeding 200 kbps (in at least one direction); otherwise, The FCC  will impose penalties.

What Is A Router?

The router is like a bridge between ISPs and the World Wide Web. Routers have tables that route your data packets from origin to destination. It does not transfer information to the wrong places by intelligently routing.

How To Start Internet Service Provider Business?

How to start internet service: The ISP profession can be very profitable because your customers pay for service monthly, and if you satisfied them, they won’t change their provider and stay with you for years.

To start internet service provider business, you’ll first need to do some technical research and get the necessary permits and licenses.

What Is A Proxy Server?

A proxy server is one of the ISP servers located between the user’s computer and web pages. In this way, the requested information and data first goes to the proxy server, and also the response passes through the proxy path and reaches your computer.

What Role Do Protocols Play On The Internet?

Computers and servers need a set of rules to communicate with each other on the Internet. The protocol is the set of rules that make up internet communication procedures.

So, it is impossible for a host (computer or server) to communicate with another host with a different protocol. They must use the same protocol so that they can understand each other.

How To Start Internet Company?

Many investors want to know how to start internet service provider business. We discuss this important question in this article. You should consider many things like preparing a good business plan,  evaluating the area,  finding a fiber provider, billing, and customer management.

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