Access Provider

from Internet Business

The Access Provider's role is to provide connections to the Internet for a relatively large number of clients within a local telephone district. An Access Provider will have a large bank of in-dial modems and, increasingly ISDN lines, each of which can be allocated for permanent or dial up connection. These connect to the Provider's host computer(s) which provide such basic services as e-mail collection and on through one or two trunk connections to other nodes on the Internet.

Statistics indicate that a limited service can be provided to 50 users per dial up line, with Providers increasing their costs while improving and quality of service by reducing that ratio to as low as ten users per line. Access Providers may also provide a limited set of Host Services for their clients. Access charges vary from under $1 per hour for services which keep their utilisation rates high and their costs low to around $6 per hour for prime rate dial up access. A range of purchase plans and extra services are often offered.

This area of the business is maturing rapidly, with increasing economies of scale in the larger telephone districts[1] allowing clear differentiation of service quality and charging regimes.
It is expected that those areas to be passed by the roll out of cable by Telstra and Optus will soon be offered data connections which will make it hard for current Access Providers to remain competitive.[2]

However, one significant area of opportunity can be expected to have a longer life. In smaller semi-rural telephone districts, the costs of Telstra's Austpac and 013 connections to remotely located Access Providers remain prohibitive, so there is a place for a local Access Provider in each such telephone district. Even when cable comes to the larger towns, the increase in demand from out-of-town users should balance any losses. By siting a preconfigured local access module in a suitable local business, per site costs may be kept under $100,000 to service 1000+ users. Utilisation monitoring software can be developed to allow a range of different standards of service to be offered so that one Access Provider can adequately cover the local market. Governments have serious concerns about equity and access and are likely to look favourably at any private initiatives which enable their social objectives to be met within an increasingly deregulated market.

Given profit sharing arrangements with local business partners and a staged deployment of at least ten sites, return on an investment of $1.5 million could be expected to average better than 50% per annum for at least five years. This could be scaled in Australia alone to at least 40 sites. It is unlikely that the first serious entrants into this market will be subject to much real competition.

[1] e.g. Sydney and Melbourne

[2] This assertion is seriously challenged by the December 1995 announcement that an Access Provider would be a key member of a Sunnyvale, California, trial roll out of 10Mb cable modems.