There are many reasons why you would want to become an Internet Service Provider (ISP), especially a Wireless ISP. You may have connectivity issues that cause more problems than the service is worth. Or maybe there’s a lack of competition in the area, which reflects in the cost of your internet and the customer service provided. While starting your own ISP is often a rewarding task, it’s not an endeavor you can set up quickly as it takes a lot of time and investment. Part one of this three-part series of creating your own wireless ISP is about getting started.
One of the first steps for business success is understanding your customer base. Therefore, step one of creating your ISP is to conduct market analysis. A market analysis provides a thorough assessment of the industry where you identify your potential customers, their buying habits, the size of your target market, the competitors in your market, and the weaknesses and strengths of said competitors.
If you don’t know who your customers are and what they need, your business struggles to provide effective services and can’t market your ISP properly. The first step in finding the demographics who will use your community ISP is to create a survey to discover what people need, find out what resources are available, and raise awareness of the project.
When you create your survey while letting the community know that you intend to start an ISP, it’s best to use closed-ended questions to gather quantitative data. You need to ask if the house or building has internet service, how much they’re paying for it, and if they’re satisfied with their current ISP.
Contact internet providers as they’ll provide a map of where they provide service. Instead of paying extra to dig up the streets and add new fiber, find a building that already has fiber built-in and is close enough to your potential customers so you can use it as a relay site. A good relay site needs to be within close proximity of your customers and be in a place for easy mounting, maintenance, and access to 115V AC power.
Fiber backhaul is when you either deploy additional fiber infrastructure or lease unused fiber, also known as dark fiber, from a third party that already owns existing fiber infrastructure. While leasing existing fiber sometimes means that you depend on a direct competitor and significantly increases your operating expenses, laying new fiber lines takes time and even more money.
Some wholesale fiber companies that lease fiber lines in the United States include:
- Crown Castle
- Hurricane Electric
Research Spectrums & Equipment
In the internet industry, a spectrum refers to the radio frequencies that allow wireless signals to travel. For the internet, there are 5G, LTE, and unlicensed spectrum solutions. An unlicensed spectrum operates in the 6GHz, 5GHz, 3.5GHz, and 2.4GHz range, and you don’t require special authority to operate the equipment. LTE equipment uses 4G LTE technology from licensed or registered brands. In the United States, this is one of the most common bands for ISPs, and only a certified CPI is allowed to install the equipment. Some unlicensed and LTE solutions include:
Formalize The Business
While you’re in the process of researching spectrum and equipment, you also need to take some time to formalize the business, which also takes time. Once you research and interview potential customers, you also need to write down the skills required to put the hardware in place and contact the people with those skills.
While you’re contacting electricians and other skilled individuals, you must also perform finance modeling and create your budget, which even beginners can do. Once you find out your budget and what you need to run your business, you need to raise funding. There are several ways you can raise funds to start your ISP business, which usually require some upfront capital. For those that have a lower risk tolerance, consider becoming a host before transitioning to an operator. Check out our interactive calculator that helps you assess how much capital you need to become a host versus an operator. And when you need the capital, here are several ways you can find sources of funding:
- SBA loans
- Angel investors
- Venture capitalists
You may wonder when to form an LLC, but you shouldn’t create an LLC too quickly. It would be best if you only did so after hiring your first employee, receiving money from an investor, or making your first sale. Or all three. The second post of this three-part series covers pre-deployment, such as negotiating bandwidth pricing for different tiers, analyzing and securing sites, and establishing a budget for your wireless ISP.