Startup challenges ISP market status quo
- 20 October, 1999 12:56
Internet service providers (ISP) that own their own infrastructure will finish ahead of their business competitors due to the ability to provide cheaper and better quality services, a new ISP claimed yesterday.
Enet21, a five week old Virtual Internet Service Provider (VISP), claims the outright ownership of its infrastructure has allowed it to avoid the costs usually associated with being a middle-man between the user and a carrier, allowing it to pass on the savings to its customers.
"By owning our equipment and housing it on the carrier's premises, we enable Enet21 customers to dial direct to the carrier thus enabling us to charge less for the service, " explained Enet21's managing director, Julian Carter.
The company claims to have achieved instant success among corporate and government clients by providing "high quality Internet access" cheaper than its carrier - connect.com.
According to Carter, Enet 21 charges users $900 a month for unlimited access and unlimited traffic. By comparison, connect.com users pay $1000 for the same service, while ISPs using connect.com's infrastructure are likely to pay even more.
Carter believes "third-party" arrangements often result in users experiencing drop offs, busy signals and slow connections giving those who own their infrastructure an additional advantage.
"Our ratio of users to the modem is around 7 - 10 users to one modem whereas the smaller ISP's have a higher ratio adding to the level of drop offs and slow connections," Carter explained. "We keep our ratio down to 7:1 and that ensures a quality service."
But despite potential savings, the majority of approximately 650 ISPs in Australia still provide services to customers by leasing equipment and lines from carriers.
However, industry analysts predict the advantages of infrastructure ownership and customer demand will drive more ISPs towards the VISP model.