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GETTING INTO THE ISP BUSINESS
Rank: Elder Joined: 7/26/2007 Posts: 6,514
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After seeing all the clamour for lower prices, better speeds and Access profit numbers, I'm thinking of starting up a small ISP which will focus on three things: 1 Realistic pricing 2 Quality 3 Profits!! Anyone with any info on how hard it is to get a license? Infrastructure looks easy... KulaRaha attached the following image(s):  ispimages.jpg (3kb) downloaded 6 time(s).Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 11/19/2008 Posts: 1,267
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KulaRaha try the cck website http://www.cck.go.ke/licensing_information/Isaiah 65:17-Look! I am creating new heavens and a new earth, and no one will even think about the old ones anymore
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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That CCK is jargon to me....I wish there was someone with real experience to consult. Unfortunately, wazuri has soo few members that posting here is like talking to yourself!!! Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 6/8/2007 Posts: 675
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I have a few friends who have been in the ISP business. Let me try pick their minds... Form is temporary, class is permanent
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Anasazi, i would be very grateful for some tips. Its obvious there is so much space here for a new entrant to operate. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@KulaRaha as we await this Anasazi's feedback, let me tell you that Access Kenya know how the business works hands down. We complain but they've locked in 42% SME market; and any later entry can only attract niches: KDN [backhaul], Zuku [triplay, SOHO], Safaricom [individual, mobility], TEAMS [fibre] etc. Business though is very profitable with margins of upto 45% EBITDA [measure they use].
Easiest was to begin may be to begin reselling already surplus bandwidth to clients which can be got very easily from KDN, Jamii etc, in order to establish the name. Most guys use unlicensed spectrum [getting congested though] when starting. A license should be quite easy to get judging by the number of ISPs but @Anasazi can give finer details.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Muganda I was thinking the same thing. Remember when Safaicom "relauched"? Kencell had a firm grip on the amrket, expensive post paid lines etc. Safcom came in with a betetr price, not really better service, and killed Kencell. Access is a fat turkey waiting for a fast mover to come in and kill them. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@KulaRaha, but Kencell did not have even 1% of the addressable market at the time. Many SMEs now have email addresses and connection to email / internet. The market penetration for these services [for all ISPs combined] is now quite quite high.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Any idea where I can get some stats? like number of connections, average line size, geographical distribution etc Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 9/15/2006 Posts: 3,905
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@KulaRaha wonder whether you trade with African Alliance. Saw someone with an analytical report on telecoms in Africa [including Access, Safaricom, KDN] done from their HQ and sent to high net worth clients. Quick scanned but couldn't get my hands on it though.
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Let me get that report and see. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 10/11/2006 Posts: 2,304
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tho I cant specifically give u clues on how to start an ISP, I think ua idea is great. We need competition to drive internet prices down and let the benefits trickle down to wananchi. Conventional thinkers waste time building shelters when they are unnecessary and then have no shelters when they need them the most. Socionomists do the opposite.
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Rank: New-farer Joined: 11/30/2009 Posts: 10
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But Kula if you want to start a biz to sell at cheaper prices, when will you make money (profit)? Isn't the idea of starting the biz to make money? 
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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cooks, if I can make 30% return instead of 60% return and keep increasing my connections rather than be in flatline like access etc, then I will make more money than them...my penetration will be greater although my amrgins will be smaller. Kinda like Safcom vs Zain. Business opportunities are like buses,there's always another one coming
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Rank: Elder Joined: 11/19/2008 Posts: 1,267
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Cooks kularaha said I'm thinking of starting up a small ISP which will focus on three things:
1 Realistic pricing not cheap Isaiah 65:17-Look! I am creating new heavens and a new earth, and no one will even think about the old ones anymore
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Rank: New-farer Joined: 11/30/2009 Posts: 10
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Pund... and Kula...
realistic pricing from previous posts =cheaper!
this assumes that current pricing is crazy.
bandwidth costs is just one aspect look into the following:
1. last mile cost
2. network operation centre hardware and software costs
3. redundancy cost
4. operational cost (labour is expensive esp for network admins etc)
5. marketing cost
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Cooks, lets get thru this hogwash youve swallowed from the ISPs: 1. last mile cost: oh pls, give me a break!!!! A wimax transmitter on a building is expensive????? 2. Ops centre: Go see one and see the second hand equipment they have there 3. Redundancy: Oh pls, with lines down more often than up, what redundancy? 4. Ops cost: Network admins, available dime a dozen due to recent global crisis, how many do you want? 5. Marketing cost: this I agree.... Curent pricing is crazy....how can one ISP be at 1000/= while other at 3000/= and another at 6000/= for same line speed???? With margins of upto 45% EBITDA....you think they are cheap? Business opportunities are like buses,there's always another one coming
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Rank: Veteran Joined: 6/8/2007 Posts: 675
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Sorry Kularaha, not yet got the details for you! Last mile issues on some projects I'm working on driving me nuts! Will sort you hopefully at some point this week... Form is temporary, class is permanent
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Rank: New-farer Joined: 11/30/2009 Posts: 10
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kula- i like the dreamworld you live in.
the main reason that prices are different is that the line speed IS NOT THE SAME. There are sharing ratios as well as last mile constraints.
a zuku 512 does not = a AK 512 doe not equal a AK home 512 does not equal a UUNET 512!
the sharing is what happened to popote who had a 10 MB link and sold 512 for 5K. the first guys had fun and good speeds because it was not congested. At that time a 10 MB link was about a million a month. When they reached breakeven point at 200 customers they had sold 100MB. Assuming only 30 % were using at any one time they had 30MB traffic on a 10 MB link. The result is what you see today.
if you have real questions please ask...
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Rank: Elder Joined: 7/26/2007 Posts: 6,514
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Cooks, how much is a 10MB line now? How many links does AK load onto a 10MB line? Business opportunities are like buses,there's always another one coming
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