The 8 steps to opening your own ISP
Updated: Jul 8
A very exciting space in which to create a new business is in the field of providing internet services. In terms of scope for development, the (Internet Service Provider) ISP environment in South Africa, and the rest of the African continent, is practically still in its infancy and there are numerous opportunities for new entrants to carve a niche and be competitive.
Especially in the more established ISP markets across Africa, new entrants are mushrooming. This has created a market that is hungry for alternatives and competition, opening the door for new players.
There are so many different aspects to Internet service provision, that one can create an ISP focused on a specific segment of the market to discern oneself from the competition. While there is scope for the entry of more big players in the market, there are also opportunities for smaller service providers to enter the fray. These operations require neither a large company infrastructure nor millions of USD in finance to get off the ground. For example, in the US two brothers started their own ISP, Brooklyn Fiber, on the roof of their grocery store to bring faster and more reliable Internet to their neighbourhood.
These are the steps that prospective entrepreneurs can follow to set up their own ISP:
1. Market research
Once you believe that you have identified a need in the market, it is time to carry out comprehensive market research and ensure that there is sufficient interest in your service, and that you will be able to provide it profitably. Predominantly, regulatory restrictions and getting access to the larger global networks will determine whether you are able to set up the ISP in the first place. Should this be the case, then it is necessary to create a long-term business plan that sets out the plan for the business. This should focus specifically on how the business will expand its reach, and how it will differentiate itself against current players, but also new entrants into the market.
2. Legal considerations
Before getting started, you have to ensure that all the legal boxes have been ticked. First and foremost, you need to ensure that you have a license to operate in your chosen country. Getting these licenses in place may take some time, or not be possible at all. I would always suggest consulting regulatory specialists aware of the nuances in the market you are planning to build in.
3. Get your IP addresses and ASN
The next step is to get resources, such as Internet protocol (IP) addresses and an Autonomous System Number (ASN) from the local regional Internet registry (RIR). An RIR manages the distribution of IP addresses and ASN resources in a specific region on behalf of IANA. There are five RIRs, each covering a continent; AfriNIC in the case of Africa.
4. Decide on your transits and peering
Transits connect the ISP to the larger Internet. Because there is no single provider that connects directly to all other networks on the Internet, transits deliver traffic through multiple other transit networks. IP transit is purchased through transit providers, such as Workonline Communications. Transit providers have geographically different areas of strength depending on how their network is built. Deciding on the topology of your network is vital to its success, and usually requires expert advice. Most ISPs purchase transit from multiple providers, with different prices and service level agreements in place. Peering at Internet Exchanges (IXs) to reduce costs or improve performance is also an important consideration.
5. Find a carrier neutral facility
Carrier neutral data centres allow interconnection between the parties collocated within the facility. By using a carrier neutral data centre, you are able to switch providers, or connect to multiple providers, without having to physically move or deploy more infrastructure in another location. This is important in South Africa, because since Telkom’s monopoly ended in 2007, over 300 companies have been licensed to build networks. This creates increasing competition and opens the market for new entrants. A truly carrier neutral data centre allows an ISP to react to a developing market, keeping options open in terms of carriers and service providers.
6. Engineering skills
Many smaller ISPs opt to employ outsourced network management services, which assist in reducing risks and lowering costs from the start, as opposed to employing high-end skills on a day-to-day basis.
7. Acquire infrastructure
The next step, is to then invest in your own physical infrastructure, such as routers and switches. The choice of equipment will be decided by the design and topology of your network. It is always a good idea to thoroughly research what routing and switching infrastructure will grow with you, and meet your specific needs depending on what services you intend to offer.
8. Final setup
Now that everything is in place, only the final setup remains. This means running your interconnects to your transits and peers and configuring the routers and switches.. After months of planning, you are now ready to open your doors as a fully-fledged ISP.