Best of the ISP-Lists

Diamonds in the Sky with Lucy

Members of the ISP-Colo list disagree—in much detail—about whether or not it is still possible to make a profit selling Digital Subscriber Line (DSL) services.

[October 2, 2001]

On the ISP-Colo list in September, PS inquired,

"We are a small, albeit stable, ISP trying to divine a profit model with DSL. Has anyone implemented DSL on a relatively small scale with any degree of success?"

A number of respondents suggested it's pretty much impossible:

[NC warned] "The words success and DSL currently don't go in the same sentence. I doubt you'll be able to find a single company that isn't in the red because of their DSL offerings, particularly if they don't have other services to keep them alive."

[DD agreed] "The only way to make a profit on DSL is on a reseller commission basis with no backend support. After the commission, figure in the cost of sales and customer service, and where's your profit? If you place the equipment in telco COs, how many lines must you sell? Plus, you the DSL provider must provide all the installation, insurance, and operating costs: it's no wonder the DSL industry is in the toilet."

Others took the opposite view:

[AP scoffed] "That's utterly wrong: my company has been profitable since day one, and all we do is DSL. It's more a question of bad business models and imprudent business decisions on the part of the other DSL providers."

[OP added] "Honestly, it took us about 18 months to get out of the red with our DSL product, but it's been about six months now that we've not just been cash positive, but also profiting from our DSL subscribers. Would I keep doing it if it were the only product we were offering these days? That's a different question. Probably not, since there are a lot of other things we can offer and are offering, but as it stands now, we will keep rocking with our DSL sales while expanding our products and services. Please note: it did take major modifications to our deployment and business plans, but then again, anyone who doesn't change with the market always fails."

[EK agreed] "While we're not solely deploying DSL, our DSL branch is profitable and has been from early on."

— End

 

Online resources:
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	DSL Reports
	ISP Business Plan