A new model for ISP services

Date: 10 September 2002	Issue: Fourteen (09/09/02 - 15/09/02) (ICT World)
	Mike Brierley, CEO of MTN Network Solutions

The local Internet market has received a major boost in the past two years from the upsurge in Virtual Internet Service Providers: companies that set themselves up as consumer ISPs by piggybacking on the dial-up infrastructure of large ISPs and handling only business issues like branding, marketing and billing.

But now there is a new twist to this innovative business model: the Virtual Leased Line ISP. Instead of signing up dial-in consumers, the VLL ISP is able to sign up corporate customers for whom it installs digital high-speed lines. Since the installation and management is handled by one of the major ISPs, the VLL ISP does not need the infrastructure and expertise that usually takes many years and many millions to build up.

The leased line market is fairly saturated from the point of view of the obvious corporate users of such facilities. This means market growth has to come from innovative solutions, in the same way that it took innovative solutions to rejuvenate the dial-up market.

Local area network (LAN) management companies and desktop support companies are the ideal vehicle for reaching an untapped market for leased lines. These are the people who have the client relationships. Working closely with such businesses makes it possible to reach new client bases that were previously unacknowledged and therefore under-serviced.

A critical issue, of course, is that the large ISP has to keep its corporate ego in check, and allow its virtual partner to brand the service and manage the customer relationship, including issues like billing and queries. In this model, the large ISP is an infrastructure provider to the VLL ISP, but is crucial to the quality of the service as well as support.

Large ISPs can no longer rely only on their reputations to grow their business, Business ultimately is all about relationships, and the only way for the Virtual Leased Line ISP model to work is to respect existing relationships.

According to the report on 'Internet Access in SA 2002' from World Wide Worx, the number of leased lines installed in local businesses will grow by around 20% in 2002, but only if ISPs maintain strongly customer-oriented strategies.

The Virtual Leased Line model is the ultimate example of an ISP focusing on the needs of the customer rather than of the ISP itself.

It is a fast-growing portion of our business, and it is working well for us, for the virtual providers, and for the end-user. Everyone wins.