A Long Term ISP Approach
Posted on 01/08/2013
Working with ISP’s that adopt a long term business strategy is the most productive way to grow revenue in an increasingly competitive area of the market.
Mark Curtis-Wood, Head of Networks at Nimans, says liability and risk remain two of the biggest factors dominating the ISP arena.
“Inevitably there’s always going to be those concerns. One of the advantages of dealing with a larger ISP is that they have core connectivity which allows you to re-purpose and re-use a connection for a different customer. When you are choosing an ISP it’s important to choose one that’s going to work with you over the long term especially on the commercial side. As a reseller the last thing you want is having an end user that goes bust and you are facing contract liability for the next two years. You want an ISP that’s going to work with you and take an objective view that you’ve got a long term relationship with them - and whilst that one connection has failed there will be many more opportunities further down the line. This is dependent on the ISP having the ability to flex their own network up. You have to pick an ISP that owns its own core network and one that’s got flexibility in its business model.”
Mark continued: “Anything we do when we work with a reseller is based on a long term rather than short term approach. We understand there’s a risk involved from all sides. We are always keen to work with partners that not only support us but also work with resellers that are in it for the long term themselves.”
Consolidation in the market has taken place particularly at the smaller end of the market, where some ISP’s have diversified their operations, as Mark added: “If you look at the big players there have been some notable acquisitions. What we have seen is a lot of the smaller ISP’s being swallowed up because broadband has become very commoditised. When estates are based on high quantity and low margin it becomes a lot harder to service because you are making smaller margins and you have such high volumes to maintain.
“Some ISP’s have moved into other value added services using higher bandwidth because you’ve got fewer customers to deal with and can make more margins. But on the downside there’s more liability so if it goes wrong you are more exposed.”