Reselling Broadband

[RasAshcroft]

If it's not a bother, I'd love some information about starting up and running a (Virtual) ISP by reselling broadband to customers. I'm a beginner who is just starting to do his research into the subject.

I've been told that margins are quite low at the moment (and that it's rather futile since the current market pricing is hard to beat), but my primary concern at the moment is how the actual business model works.

My three main questions:

1. Do you purchase wholesale bandwidth directly from BT or is it better to use a white-label service such as ICUK?

2. What are the costs involved in signing up a customer? Does line rental figure in all of this?

3. What is involved in running the business? (e.g. support, maintenance, technical expertise etc)

Other than that, just a general rundown of how the model works would be great!

Cheers in advance for any replies.

 

[That Guy]

I have not been down this route but would think it would be near impossible to compete with the other suppliers like BT, Sky and TalkTalk etc.

I imagine the work involved would make it not very worthwhile.

 

[RasAshcroft]

That's what I've heard, but I'm still curious about how the model basically works, i.e. what the wholesale bandwidth costs are for resellers and what work is entailed. I'm particulary interested in the workings for FTTC (fibre to the cabinet).

Can't imagine too many people trying to beat those guys on price though.

 

[astutiumRob]

I've been told that margins are quite low at the moment

You buy at £20 you sell at £15, and you shutdown when your seed money has all gone
- that's the basic business model for new entrants into the marketplace

 

[british steve]

Its easy enough to compete with the big boys. Just offer some customer service, people will pay more if the service you provide is good. If your just starting out you are best off using an aggregator as they will already have buying power. There is plenty of money to be made in telecoms if you do it right!

http://www.daisygroupplc.com/

http://www.gamma.co.uk/

http://www.ninetelecom.co.uk/

http://www.channeltelecom.com/


And loads more. Unless Daisy or Gamma offer you the Worlds best deal best to avoid them if possible.

You can find more telecoms info on the following two sites.

http://www.commsbusiness.co.uk/

http://www.comms-dealer.com/

If you need to you can outsource your end user support, billing and direct debit collections.

Dont forget that you will also be liable for your non paying customers!!!

Forget ICUK

 

[RasAshcroft]

Thanks Steve. Any reason I should be wary of Daisy/Gamma/ICUK?

Also do you (or anyone else on this forum) have any experience in the business?

 

[cjd]

Also do you (or anyone else on this forum) have any experience in the business?

We sell broadband, almost exclusively to our existing customers to use with our VoIP services. I really,really, would advise against getting invoved.

It's not been a start-up game for many years. There is heavy competition from many well funded suppliers the majority of whom are selling below cost price in order to gain customers for their other products - phone and TV. This activity sets the price for others and it's far too low to make a profit.

Support is complcated, difficult and expensive - most of it you are not in control of but your customers will still expect you to fix anything they perceive to be wrong even if it's in their own network.

Think of something else.

 

[cart-com]

I affiliate to plus net i get 50p per signup per month.

 

[british steve]

Thanks Steve. Any reason I should be wary of Daisy/Gamma/ICUK?

Also do you (or anyone else on this forum) have any experience in the business?

Daisy are just CRAP. Gamma will sell directly to your customers via one of there other companies and will cut you out, and ICUK just not worth bothering with.

While I dont use them and I am not recomending them I would choose Nine. sounds like your just starting out - nine have a wide range of services and can hold your hand in the early days while you get established. Nine also own a billing company so can take care of that for you too.

What you need to be looking for is ownership of the end customer - should you build up a decient enough size business and want to sell up, its owning the customer that gives your business value if you want to sell.

Dont go for home users - unless you want to work for 50p per month per customer. These are the users who want it for free and then ***** like **** when it dont work. Target business users - offer good service and they will pay more.

My advice is if you want to do it then go for it. Just make sure you go in to it with your eyes open!!!!

 

[RasAshcroft]

Any word on what Eclipse is like?

 

[icuknet]

ICUK just not worth bothering with.

Steve, is there any particular reason why it isn't "worth bothering" with ICUK? Unlike the company you are 'not recommending' who resells Plusnet broadband, we own our own network. An investment of £250,000 was put into our broadband network last year, with a similar amount set for this year with emphasis being placed on quality and redundancy. The company has been in around since 2001 and is free from borrowing or external funding unlike the other names you supplied.

We look support 50,000+ clients and over 500 resellers. What we pride ourselves on is customer support and putting our resellers in the driving seat via our unique in-house developed control panel which encompasses solutions for hosting, telecoms and of course broadband from a single interface. Now, I'm sure some of those numbers might not match those of our competitors, however I'm confident our service levels, support, and the platform facilities will exceed what they can deliver. Our customer churn is minimal, which tells us that we must be doing something right... and all of this has been achieved without direct advertising so that is why many haven't heard of us.

I do however agree you Steve that customer ownership is key, and that comes as standard across all our three reseller solutions. ICUK started as a virtual ISP purchasing dial-up minutes from one of the first UK ISP's - CIX (a company we purchased last year), and later went on to resell broadband for lots of other companies with plenty of disasters and problems along the way. One of these issues surrounded customer ownership, so when we sat down to develop our own platform we made sure that we didn't repeat the same mistakes we witnessed with contracts, billing, and directly supporting our customers.

Of course you could overlook us and instead opt for one of our larger competitors, but to rule us out seems foolish without seeing what we can deliver first.

Sorry if anyone deems this to be an advert, but having stumbled across this forum from a search on Google I was a little disappointed to see someone, who as far as I can tell isn't or hasn't been a customer, dismiss us when I know that ICUK has so much to deliver - and deliver it with confidence.

Paul Barnett
Director, ICUK