Enter stage left Darryl Millar, and the Internet access provider (IAP) business model, used by his company, Access Only. In the same way that budget airlines shook up the commercial aviation industry, Millar is looking to turn some heads in the world of Internet access.
"We're now looking at a very mature dial-up market; most users don't need a help desk to be on the other end of the phone line 24 hours a day," Millar explained. "All they need is access, and that is all we provide."
Having initially been employed to sell Cisco infrastructure before moving to the business acquisitions team at a large ISP, Millar is used to sifting through Internet business models, and has designed the Access Only approach to be both simple and minimalist.
"Customers pay for the service in advance once a month, and are sent reminders via e-mail and SMS," Millar said. "The flat rate is US$13.75, but they can reduce their costs through a referral program if they want to recommend the service to others."
However, the Access Only model goes beyond direct-selling and referral programs, with a number of groups already reselling the service through religious and community organisations as a fundraiser. The company is also looking to establish a base of resellers who can apply their own branding to an Access Only connection.
While the basic IAP concept has taken a while to develop, Millar says that the major challenge has been technological.
"The company had its inception about three years ago, but the market wasn't ready and the technology wasn't yet available until the end of the last year," Millar said.
Access Only's approach is based on access to Telstra's wholesale MegaPop service, which enables the company to quickly ramp-up national coverage without investing in the hardware or infrastructure once required to run such a network. Via this service, Access Only effectively outsources its dial-up service to Telstra, so it can offer customers the opportunity to connect to the Internet through their local exchange.
"The MegaPop offering is essentially a traffic aggregation service," Millar explains. "So you need to be able to commit to a few thousand users and pay for usage 18 months ahead of time. This tends to rule out many of the smaller players."
Moreover, extensive use of .NET technology enables other ISPs, community groups, small computer retailers and schools to offer re-branded Access Only Internet access, without investing in the infrastructure.
"We first started looking at ways to set up the company when we attempted to become branded agent for another ISP--that is, resell their access, but we were looking at anywhere from $36,000 to $40,000 in set-up costs alone," Millar said.
However, the Access Only reseller strategy enables participating ISPs to on-sell the service to their customer base for an initial set-up fee of $516. Collecting $2 per month per paid-up subscriber (paying $13.75 per month), the ISP can increase its margins and add value to the minimalist Access Only offering.
"We are encouraging community groups and schools who have signed on to the myschoolisp.com.au program to add their own value by running Internet information and training nights on the Internet in the school library," Millar said. "Some smaller ISPs are simply using us a wholesale service provider, because it is cheaper than running their own infrastructure."
Participating resellers are also able to host their own customer information, and integrate with the Access Only back-end through an application programming interface (API).
Relying on word of mouth as its primary form of marketing in the early stages, Access Only has managed to sign up 20 new resellers over the last month, leaving Millar optimistic about the future.
"At this stage we have to be careful not to die of indigestion by growing too quickly," Millar said. "And that's a good position for any business to be in."
