Dial Up ISPs

[interactive]

Something I've been pondering for a long time and hope to start when I finish high school and a few more college classes is a ISP. Believe me I know what goes into one, such as work, equipment, finances, etc.. But my question is do you guys think that dial up (56k moreover) will be around in the feature (say 2-3 years down the road). Where I live there is currently 3 ISP's and I can honestly say they suck. I know alot of people locally don't have access to the web let alone a computer. Any input is greatly appreciated.

[Dapon]

That's a good question, and probably one that can't be easily answered. IMHO ISP's will become a thing of the past. DSL and cable are becoming cheaper and more attractive to the consumer than it ever was before. Some of the larger ISP such as AOL now charge something lie $28/month for service. If you add a second phone line it adds another $15/month to the price. You can get DSL for $49/month everywhere and cable is less than that.

I know you can get dial up for as low as $9/month from NetZero but you can't compete with that. Your costs will be higher than that. I do have expereince in this area. While I was with Verio we offered both dial up and DSL. Biggest pain in the arse you could imagine. We made about $6/month on dial up and exactly $5/month on DSL. That was at $19/month and $49/month. All tech problems were out of our control. But customer blamed us for everything. Our DSL was through Northpoint. They went bankrupt. We had to refund money we didn't even make. Customers just knew they bought it from Verio. Didn't care about Northpoint.

My opinion is a bit biased because of the bad taste I have from those experiences but wanted to share them with you anyway. Do what you think will work for your business but be carefull. Thats just my two cents worth.

Good luck.

[interactive]

Like I said there's really not that many ISP's around here. There's like 5 or 6 companies that are bringing wireless in and charge around $29.95 a month. But for the casual user $12.95 (which was what I was planning on) isn't too bad. I've figured out costs and would turn around $7 per user. I'll also offer web hosting, and that will bring some more income in. I'm not sure though if in the future dial up will be something of the past.

[James]

you might want to look into a VISP system it alows you to have lines every where with out the massive cost. for examle if you go on a one of there plans your base cost just for access is 7.75 a month per user per month. add in the cost for e-mail and that brings it up to 8.50 i think per user per month.

now this does give you lines all over the us last count there was 11,000+ lines setup.
there site is www.yourownisp.com/dialup.asp and i have been thinking about doing this as well down the road.
* NOTE no i am not making anything from this just a good plan with a good system and grate prices.
hope it helps
James

[Dapon]

I think dial up will be a thing of the past. It is just too slow for todays internet user and the price of DSL and cable is coming down. I sure wouldn't be buying any dial up stock. But you live in a market that it could work for you. Remember though, you are counting on the local central office and they aren't always the most reliable or caring when there is a problem. Your local phone company knows it is the only game in town.

[interactive]

My uncle owns a ISP in Tucson which is around a hours drive. What I'm planning on doing is getting a PRI line setup from where I live to Tucson (which is around $800/month). Then I just colocate my equipment in his shop. That way the only thing loca that I rely on is my PRI line. Are there any true dial up providers on this board (not just resellers) that could post comments?

James: I'm looking at that right now. It's not a bad deal at all.

[Robert]

Dialup will never die. It's reliable. When cable goes down or dsl, you got a dialup!

[Chicken]

Besides, I know many people who all they do is check a few web pages from time to time, and get their email. They do not want to pay more than $20/mo. for this. While the amount of users choosing broadband is exponentially increasing, I'd guess that the number of computer users is expanding so much that there has been a surge in dialup users as well.

[Rox Off]

Dialup will be around for awhile. Even though high speed access prices have dropped a little, look how many mergers and closings have happened. It may still be awhile before DSL/Cable price drops to far below the $49 mark. While on the other hand companies like EV1 continue to grow provifind reliable dialup for $10.

Consider how many users are the net really have highspeed. Most of the users on HHO and other host forums are really power/business users that consider highspeed a requirment. With the a slow economy and unemployemt problems dialup is becoming a popular solution.

Next take into consideration how many people are not online yet. You have large target groups such as seniors, lower income families, and casual users that don't consider speed important. I cannot remember the numbers for americans actually online, but I remember it wasn't as high as I thought. So as computer prices drops and dialup continue to reach more areas, more users will need dialup.

Another factor as a cable user I maintain a cheap dialup in case of cable downtime. So I think room for growth is still there.

[RH4U]

Well there is one major advantage to dial-up!

You can connect your laptop to a cellphone using a dial-up connection to retrieve an internet signal. Currently there is really no substitute for this at all. No cable connection allows you to dial in, also the wireless connections that do exist are so limited to service area's that they are pointless for anything other than home use unless you are in a major area such as N.Y. New York.

I think dial has a few good years left, and if you are going to be focussing mainly on your local area that doesnt already have many carriers then i really see no reason why this cant work out. Although reselling would probably be a good step to take first to test things out.

Without my laptop, cellphone, and earthlink i would not make it through one day:)

[Dapon]

Dialup will be around for awhile. Even though high speed access prices have dropped a little, look how many mergers and closings have happened. It may still be awhile before DSL/Cable price drops to far below the $49 mark. While on the other hand companies like EV1 continue to grow provifind reliable dialup for $10.

Part of the problem for the little guy is there are compnies like EV1 offering $10 dial up. I don't think it is possible for you or I to compete against that. I know I copuldn't make a profit big enough to make it worth my time.

I am speaking from my past experience when we sold dial up for $19.95/month and dropped it because of the small profit marginm and the problems that came with it. And before anyone questions the companies ability to do it let me say that was Verio. They no longer offer dial up or DSL. All those customers were switched to Earthlink. So I have sold both to many customers. Just my opinion.

[DarktidesNET]

I'm still using Dialup. Not by choice, but I still use it.

Dialup is like shared hosting. Many people need it, though people are gradually just getting dedicated servers (and cable/dsl) just because it's not really that much more now days.

Not everyone wants to pay for broadband when they will not use it. An example being grandparents etc who just want to email pictures of their kids around.

[interactive]

Thanks for the input DarkTides. There is a large retired military group here also. There's also a rather large Army base which has around 40k people living on it. I need ot find out if the military supplies them with any sort of a connection. If not another area I could market towards.

OT: I'm not sure if you know about it (chances are you do) but if you live in a area where you can't get broadband cause you're not in the area or whatever, look into satellite. I'm on it, and althugh it does have some latency problems it's not that bad overall.

[NACmwinship]

Dialup is in decline, especially in metropolitan areas. While there will always be a need for dialup I belive that most of those customers needing dialup access will probably serviced by the ATTs and Worldcoms of the world who can efficiently and cheaply maintain a nationwide dialup pool.

I personally wouldn't open a dialup ISP at this point in time. I would suggest that if you decide to go ahead with this, augment your dialup service with others like webhosting, and dedicated services.

[interactive]

If I'm not mistaken doesn't ATT and Worldcom just lease bandwidth from small local providers? I believe AOL does this also.

[James]

yes they do its called perring arangements(sp?) or they lease a hunk of lines/numbers from a phone comp and have them host the systems there needed to route the dialup trafic to them in the local pop building.
james

[Dapon]

At the time that I sold DSL there were only three providers. They were Northpoint, Covad, and I don't remember the name of the other one. They would in turn lease the lines from the local phone company (central office) and resell to everyone else. Northpoint was the largest and they went out of business overnight, leaving us holding the bag.
The price breakdown was like this; central office charged $40, Northpoint charged $5, and we made $5/month. The structure has probably changed now since this was in 1999, but it sure wasn't worth the trouble back then.

We sold 1,000's o customers DSL and all they knew was trhey bought it from us. They couldn't care less about Northpoint. There DSL didn't work and we were responsible for it. As a manager I fielded 100's of calls about what a lousy company we were and what were we doing about it. Left a bad tatse in my mouth.

[RH4U]

UPDATE: Timewarner just announced that they will now be offering dial-in access for customers looking for a dial-in option for cell-phones, etc.. so my previous post is now pointless:(

Considering that this will probably be a trend i would say hold off on your considerations unless you think you can definately control your local market.

[MrManager]

My opinion on the long term viability of dial-up ISP services and associated core offerings (from a web host standpoint):

Dial-up, ISDN, xDSL, frame relay, frac-T1, full T1, digital subscribers and optical carriers will continue to exist in their current form for many years to come.

Why? I specialize in business-to-business (B2B) services and I have still much to learn about the massive market among small-medium size businesses and the respective revenue opportunities that exist. These companies will always need/want a reliable connection to the outside world installed in their building/office and as we all know, businesses seem to enjoy playing the game of 'catch-up' when it comes to implementing technology - even when they know it will benefit them.

As an example, I can envision a scenario where you have a company approach you, the web host and/or ISP reseller, with the problem of needing to affordably connect 100 nationwide sales offices to their Corporate office via DSL and VPN (IP tunneling). Saying they are currently paying too much and are sending out 30 checks to 30 different companies, they want to save money and streamline their billing process. My tho0ught would be, "Sure DSL we can do, but what if that connection ever goes down?" Their bandwidth demands are typical minimal, so here I come providing them a block of DSL accounts (bringing volume discounts) and a block of 20 reserved dial-up accounts for FREE to serve as their back-up service to connect. What if they want a faster connection? That's where frame relay, ATM, frac-T1 or other carriers enter the picture.

Now, you figure reselling 100 Business Class DSL accounts (ie Covad Reseller Agents require minimal up-front financial investment) at 100 bucks a pop, that would bring you to about $10,000 per month in revenue, from which you just absorb the cost of the dialup accounts (about $150/month for 20 accts). That's just one example where you can find a need, fill it and, in this example, start pulling in around $120K in annual revenue. Utilizing these so-called 'obsolete' technologies (ie dial-up) to close the deal really serve a valid purpose, are relatively low cost and bring that warm fuzzy to the customer who may consider you down the road for future IT-related services. Residential DSL is a whole other ball of wax I would never touch with a ten foot pole unless I was glutton for punishment and/or the profit margins widened considerably.

While I believe that technology is always advancing, I also believe that legacy systems and technology such as dial-up (and even ISDN in some cases) will not always have the same exact APPLICATION or market it once had, but it will certainly be around long enough for those who are creative enough to capitalize on it for a tidy profit. If nothing else, the narrow profit margins on these types of services will certainly pay off in mindshare and gain an advantage over your competitors. When your customer see you providing solutions, it may not be that unreasonable to look forward to their call asking if your company would be willing to provide them with a quote on load balancing or Citrix farm/ clustering or other managed IT solutions.

So, I really believe (hope) dial-up will be around for a good while to come. Will the client base consist primarily of individuals and typical household use perpetually? Probably not, but you can certainly count on pro-active companies willing to lend an ear to a sound idea when it comes to strategic planning for downtime contingencies at remote locations. And that's what we're all here for- providing solutions and making some ice cream money at it.

That's my take anyway. =)

[webworkz]

Your best bet is to become a virtual ISP. You can get accounts for about $9.00/month, to start, from an aggregator, or go directly to the networks on a minimum commitment for about $4.00 [this usually requires a large investment/commitment].

There is a lot of money to be made in dial-up. If you do it right, about $8.00 - $10.00+ per account. Hosting is an excellent secondary product to offer, along with the dialup.

Dial-up is not going anywhere. Despite claims that DSL is everywhere, there are thousands of small towns who have no option but to use analog connectivity.

We've been doing web hosting for 5 years, and ISP for 3 years; and believe me when I tell you: There is profit in it, and it's not going anywhere.

I know there are those out there who claim it is a dying breed, but it'll be around for at least another 20 years.

The only decent argument is that most dial-up customers are flocking to cable/DSL, which is entirely incorrect except for metropolitan areas; but most people don't live in metropolitan areas.

I'd say no to running a hardware-based ISP.

Running a virtual ISP is the best route to take. You can't be competitive with the nation-wide providers if you're paying for your own equipment, bandwidth, etc.