What Does It Take to Startup Your Own ISP?

Zachary on 18/03/2021 - 23:15
Last edited 19/03/2021 - 04:44 by 1 other user

Just a random question that popped in my head just now that apparently no exact question has been asked or answered before(Unless it has on an unrelated topic which turned offtopic….) on the forums here.

So by ISP, I mean Aussie broadband, TPG, Optus, Superloop or Telstra and other ISPs (Internet Service Providers). What's the monetary cost(if you could break down the total, that would be nice to see in the detail) and what other things would I need to consider if I were to start up my own ISP….?

Internet

Comments

  • Sum-Ting Wong on 18/03/2021 - 23:56
    +1

    You would probably need some knowledge of networking.

    • jv on 19/03/2021 - 00:27

      …and internetworking.

  • follow on 19/03/2021 - 00:24

    contact ispONE

  • jv on 19/03/2021 - 00:28
    -1

    and what other things would I need to consider if I were to start up my own ISP….?

    Car parking space.

  • Ozot on 19/03/2021 - 01:12
    +33

    I started my own NBN ISP "Ozot - The Esport ISP" in WA and have this documented on our FAQ page https://ozot.com.au/faq.html . We have x2 Routers in our Perth Data Centre and x2 Routers in our Sydney Data Centre. Each Router cost us $1000 each ($4000 total) and we also bought our own Server. The recurring costs are where we spend a lot of our money. Our recurring costs are Colocation space in Equinix PE2 and Equinix SY3, L2 NBN Aggregation (WA), WA IP Transit (Internet), Lowest latency 'Telstra Fast Path' (41ms) Perth <-> Sydney cable, IX Peering, NSW IP Transit (Backup Internet), and cross-connect fees. Our recurring costs are a few thousand dollars a month. Our recurring costs are going to increase when we bring the AU <-> US, AU <-> EU, and AU <-> KR lowest latency cables online. If you weren't using the lowest latency cables and didn't have network redundancies then you would be able to do it for a lot cheaper.

    I have our ISP Network Design documented on Youtube that someone would be able to copy if they wanted to.

    Fun fact: This is the first time I have ever gone on OzBargain before and I instantly found a topic I could answer :) Goodluck with your ISP endeavours!

    • rollin on 19/03/2021 - 06:38

      What kind of network kit do you use out of interest?

    • prosolutions on 01/06/2023 - 21:43

      I checked your website. It is impressive what you have established. I have few question if you could throw some light on it. How much is your monthly expense just running the business?How many customers are required to break even?

    • Parminder Singh on 05/05/2024 - 22:21

      Hello Ozot,

      I was looking for ISP Start-up articles and some how I end up here. Could you please provide the video link the one you mentioned in your comment. I did try to find on youtube as well as on your website using link you provided in the comment but that link generates 404 error. Which is another dead end for me. Even I tried to look on ozot.com pages/deep surf on website. Either I miss one or two pages or there is non in regarding documentation.

      Thanks
      Parminder Singh

  • mskeggs on 19/03/2021 - 07:17
    +1

    You can start an isp purely via marketing/customer service and outsource all the network stuff. See telcoinabox or talk to AAPT wholesale.
    To be successful down this route, you will need a differentiator as you can’t control product quality, or really, pricing.
    I considered doing this in my area, and I reckon you could make a living at it doing housecalls to help people get their nbn going. One or two people could likely support a few thousand connections with a ‘high touch’ service at pricing comparable to Telstra.
    I didn’t, because there are easier ways to make a dollar.

    • Chandler on 19/03/2021 - 09:45

      To be successful down this route, you will need a differentiator as you can’t control product quality, or really, pricing.

      Agree with the differentiator, but aren't some businesses going this route differentiating on price through lower overheads?

      • mauricem on 19/03/2021 - 10:25
        +1

        otherwise known as "the race to the bottom", who wants to win that!

        • Chandler on 19/03/2021 - 10:30

          who wants to win that!

          Consumers. As long as corners aren't being cut to meet those pricing levels, and larger players aren't using it to drive out competitors.

      • mskeggs on 19/03/2021 - 10:33
        +1

        This is specifically if you are wholesaling the network, as the costs are reasonably high (higher than the cheapest retail offers even) but you get middle of the road performance etc.
        So you can't drop the price below what it costs you to be a price leader.

        If you run your own network you can skimp on backhaul and buy crappy transit or peering, to lower network costs, but this doesn't really make much difference till you have thousands of customers.

        • Chaddy on 06/05/2024 - 18:19

          No such thing as crappy low cost networks in Australia its buy transit of TPG Vocus or Telstra or nothing.
          Peering is basically free but won't get you access to any of the major networks apart from Vocus who are the only ones who use peering. The others only buy transit off each other.
          Networking in Australia is expensive not to mention the cost of power.
          As for buying layer 3 services from other providers, it comes down to minimum spends if you spend enough money you can get it cheap.
          That is how the likes of Australia post and others have sold broadband Office works is probably a better example actually.
          Running your own network costs significantly more then just buying a layer 3 service and reselling someone elses network.
          You can get services cheaper then the provider offers them for their own retail customers but it comes with minimum amounts of customers normally.
          But you would never know how much the providers spend as its all hidden under non disclosure agreements.

    • Chaddy on 06/05/2024 - 18:30

      Nah most of those people who need help with NBN and the like just go straight to their nearest Telstra store and buy whatever gets thrown at them.
      No margins in residential internet anyway business connectivity is where the money is especially if you throw them on a multi year contract with other managed services included and make it hard for them to leave.
      Ironically that is the other part of Telstra's business model but it works.
      With my own business I've moved to doing most stuff for customers on a 12 month contract as it is easier from a billing pov though some of our Fibre NBN offerings are done on multi year contracts due to how NBN does things.

  • holdenmg on 19/03/2021 - 08:33

    A. I'm going to go with Customers, Eddie.

    Q. Are you sure, for $500,000? You can go 50/50, Phone a Friend, Ask the Audience?

    A. No, lock in Customers…

  • AndyC1 on 19/03/2021 - 08:34

    Allot more research than you have done.

    • [Deactivated] on 19/03/2021 - 09:17
      +3

      Much like your incorrect usage of 'allot'?

  • Headless on 19/03/2021 - 09:19
    +1

    Money!

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