How To Become an ISP? [Step-by-Step Guide]

If you’re here, I’m sure you already know how an ISP works. You can become one in 2 ways – Either by becoming a Virtual ISP to resell the existing ISP’s services or by becoming a facility-based ISP by starting your own network and facility. Or you can also become a regional Wireless Internet Service provider to provide network connectivity to rural areas.

The choice depends upon several factors like how much capital you want to invest, how large you want to expand your business, your goals, target audience, etc. To help you out, I have explained the types and ways to become an ISP. Let’s see how it works for you.

Ways to Become an ISP

Let’s start with all three ways of becoming an internet service provider to better understand which one is suitable for your needs.

1. Virtual ISP

Becoming a Virtual ISP or reseller is one of the easiest ways to start your journey as an internet provider with a small investment. But for that, you need to have a formal agreement with the existing (Tier 1) ISP to sell their services at discounted prices.

After buying those services at discounted prices, you can sell them to your customers at your own price to manage the cash flow. But the majority of these agreements ask for having good customer volume. So, to become a reseller, it is crucial to have a good customer base and marketing strategy to sustain in the market.

The ISP works by offering several types of services to the users along with an internet connection. These services include web servers or hosting, game servers, domain names, email and marketing services, etc.

To become an ISP reseller, a few things you must keep in mind are:

  • Research at least five or more ISPs in your area, their plans and services to choose the right one.
  • After choosing the ISP, learn about the state license requirements and what you need to obtain a business license.
  • Market your services and improve them as per customers’ feedback.

2. Facility-based ISP

Becoming a facility-based internet service provider requires a large investment for the whole setup. You need a large infrastructure with a proper power supply to provide uninterrupted connection services and a technical support staff.

An appropriate airflow system is also required to maintain the optimal temperature of networking equipment in the facility with security alarms, passcode protection and much more. 

Things required to become a Facility based ISP:

Network Infrastructure:

After setting up the place, the next important thing is to create and manage the network infrastructure. To provide smooth internet connectivity to users, ISP requires an Ethernet switch. The ethernet cable connects the local distribution points to network devices like routers and modems to provide internet connectivity.

Then the web servers are required to manage the incoming and outgoing traffic through web hosting and user email services. It is better to choose the modular approach for building the network infrastructure as it allows adding more network components later per future requirements. Thus, you don’t have to reconfigure the entire network again.

The ISP provides an external IP address for each subscriber to manage and track their online activities. Using this IP address, subscribers can retrieve information about their ISP. But you don’t know who your ISP is? Fret not; use the reliable Find your ISP online tool to get the information.

Administration:

The next important thing is hiring administrative staff to take care of legal formalities, manage day-to-day operations and build smooth communication with customers. Later more resources can be added following the business growth.

3. WISP (Wireless Internet Service Provider)

Like ISP resellers, WISP is a small internet provider that uses multiple towers to offer a high-speed wireless network in a local area. Usually, it is ideal for rural areas or regions where cable connectivity is not possible. Generally, the speed offered by the WISP resellers ranges between 50-100Mbps in various cost-effective plans.

The wireless signals require radio waves to travel, and for smooth connectivity, you must place towers at high elevations. The location you choose must be able to connect with fiber optic cables for fast and uninterrupted connectivity; otherwise, you have to install internet cables.

You also need to purchase the supported networking hardware, which can be slightly expensive but worth having for areas where connectivity is poor.

Steps to Become an ISP or Reseller

Whether you want to be an ISP from scratch or resell the existing services, some steps that are mandatory to follow are:

1. Do Area Research and Find a Fiber Provider

Start with the area research. If you want to be a reseller, compare which Internet service provider offers better services and connectivity in that area.

If you’re going to start your own network, look for a place with good connectivity, network requirements and resources for smooth operations.

2. Choose the Connection Method and Services Type for Subscribers

Choose what type of connectivity method you want to provide to your subscribers based on the area, network accessibility, budget and users’ requirements. There are mainly three connection methods available:

  • Ethernet or Copper Cables: Low cost and easy to install. But offer low speeds compared to fiber cables and are suitable for smaller speed plans ranging from 25Mbps to 200Mbps.
  • Fiber Optic Cables: Most reliable but expensive. It offers uninterrupted and faster connections even in bad weather but is only suitable for some areas. It is recommended for high-speed plans ranging from 100Mbps to 1Gbps or higher.
  • Wireless Network: This doesn’t require cable installation at home and is suitable for areas where connectivity is poor. However, it is unreliable and fast as wireless signals get affected by physical objects, neighboring networks or bad weather conditions. Suitable when you need speeds between 50-100Mbps.

Along with Internet services, check what other services your subscribers require, like web servers, hosting, game servers, telephone lines, etc.

3. Look For the Premise to Arrange and Build the Infrastructure

The next step is to look for the appropriate premise to arrange the setup. The place should be large enough for all the network and server equipment. Also, there should be proper airflow, a security system, a fire alarm and 24*7 power supply access for uninterrupted network connectivity and other services. 

Various servers are required to set up and manage, depending upon the services you provide, like:

  • Web servers
  • Billing and User Registration Servers
  • Game Servers
  • Servers for Developers, News Control, etc.

As a reseller, you need to have an uplink via the peer-to-peer agreement from the existing ISP. Per the agreement, there must be more connections than one (up to five) to offer smooth connectivity if one fails.

To work as an ISP, you need to complete the legal formalities, including:

  • Registering your business as a legal entity or LLC (Limited Liability Company)
  • Having a bank account
  • Get State Registration documents and Tax Certifications

If you are not offering any other services than providing internet, two more licenses are required, i.e.:

  • Telematic Services License
  • License for data transfer except data transferring for voice information.

For every other additional service too, you require a license.

5. Recruit Technical Support Staff

Hire staff for technical support, marketing, admin work and other operations. Also, experienced managers are required to maximize efficient work processes.

6. Promote Services through Project Commissioning and Marketing

The profitability of an ISP business depends upon a good marketing strategy. Through marketing and promotional activities, you can generate a huge customer base. The more the customer base, the better the profitability. Also, offering competitive rates and prompt technical support is crucial to sustain your customer base.

FAQs

Can anyone become an ISP?

To become an ISP, one must have a registered business entity and a good customer base. To register a business for internet services, different states have different requirements. So, checking your state requirement before applying for the license is crucial.

How much does it cost to start an ISP?

To start as a wireless internet service provider on a small scale, you need a minimum investment of $25000 for infrastructure, office and marketing expenses. The rest depends upon the type of services you want to provide, connectivity method, staff salary, marketing budget, etc.

How much do ISP make?

An ISP earns somewhere between $25K-$60K annually depending upon the services it offers, plans prices and how large the customer base is.

Give me ISP equipment list?

ISP equipment list includes a screwdriver set,  Articulating and extension ladder, CAT5 crimping set, Drill set, Caulk Gun, Cable Tester, Stud Finder, Pipe Cutter, Wrench Set, Work boots, Gloves and Drill bits.

Conclusion

Becoming an ISP requires a lot of research about services, customer base, capital requirements, legal formalities, etc. So do your research properly before making any decision and choose the suitable way amongst the three mentioned in this guide.

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