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July 18, 2024It wasn’t too long ago that the internet was considered a mere curiosity. In the blink of an eye, however, it became a global phenomenon, shaping the lives of billions. But, with great growth comes great competition.
As the backbone of modern-day connectivity, internet providers face a surge in competitors who go above and beyond for their slice of the market.
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The ISP industry has come a long way, with an ongoing revolution driven by the coming together of various technologies to meet the growing demand for digital services and solutions. This doesn’t mean the industry is without its challenges, and as an ISP, you’ll need to adapt and innovate to stay relevant.
Whether you’re just starting or have been providing internet services for years, maximising profitability requires staying competitive in a highly contested market.
Understanding the ISP market in 2024
A lot has changed since the world’s first commercial ISP, The World, provided a dial-up internet connection to a paying customer in November 1989. Increased connectivity speed, advanced tech, and streamlined processes are some of the most notable.
These days, though, an estimated 5.18 billion individuals (42 million locally) contribute to the virtual world, where news, entertainment, and social interactions are just a click away. Unsurprisingly, with such an explosive demand, the growth within the ISP industry is at an all-time high.
Internet suppliers face a complex landscape that’s as dynamic as it’s competitive. While the digital frontier expands, there are some fundamental shifts the industry must face.
Rising competition from mobile operators
As the potential to grow alongside soaring user numbers continues to entice ISPs, there is also a fast-paced push from mobile telecommunications operators for market share.
In recent years, mobile operators have taken full advantage of the uptick in smartphone and mobile broadband usage, heavily impacting the ISP market. Several large mobile companies offer data service packages that increase competition across the board and intensify the struggle for customer loyalty.
Increasingly high competitiveness and market saturation
Around the world, the ISP landscape is booming, with new service providers setting up shop every day, and in South Africa, customers have their pick of more than 200 registered ISPs. And, as the digital population becomes more savvy, the playing field for ISPs is becoming more crowded.
Within the industry, there are countless different providers, causing heightened competition. Increased commitment to improving factors such as speed, reliability, and customer support have resulted in a near-oversaturation of the market. Driving this is a continuously evolving scene of ISPs offering differentiating services, all in an effort to come out on top.
Staying relevant and becoming competitive: Here’s what to do
Fixed broadband competition continues to thrive, but your ISP business could easily fall behind without the proper measures to remain relevant and competitive. You must focus on tripping the line between successfully claiming your market share and providing outstanding customer service and support. Here’s how:
Improved customer support and higher service quality
It’s no longer enough for your business to simply provide a standard set of services. If you’re offering the same service as your competitor, your chances of attracting new customers are slim.
Successfully retaining customers while effectively attracting new ones requires you to provide excellent customer support with elevated service quality. As much as essential services form the baseline of your offering, you’ll need to consider the addition of value-added services.
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As an ISP, a consistent investment must be made to improve available training and resources to address customer inquiries and expectations. This will allow you to deliver prompt and effective resolutions to users, especially during service disruptions or technical issues.
Customer engagement also relies on ensuring your administrative systems run smoothly and create a pleasant environment. Often, human error stands in the way of this, and strategies such as automating service suspension and activation can improve your brand reputation.
Other automation to consider for additional value-added services include:
- Automated billing and invoicing
- Automated subscription renewals
- Automated customer support
- Automated network monitoring
- Automated upsell and cross-sell
Adopting superior bandwidth management
With the increasing demand for high-speed internet, internet service providers sometimes struggle to allocate bandwidth among subscribers effectively. This eventually leads to issues such as network congestion, slow internet speeds, and, ultimately, customer dissatisfaction.
As the rise of bandwidth-intensive services, such as video streaming, online gaming, and cloud storage and operation, shows no signs of slowing down, ISPs must adopt innovative approaches.
Balancing your network capacity with user demands, alongside maintaining service quality, can become an unwanted task. This means your business must focus on the effective management of bandwidth to ensure fair and efficient allocation.
Managing the cost of connectivity
It’s no secret that South African internet costs are high. A recent study done by UK-based firm Cable ranked South Africa at 113 out of 219 countries in a broadband package pricing comparison.
On average, their findings showed that monthly costs were roughly R875, with the cheapest options averaging around R209 and the most expensive peaking at R1 795. This clearly indicates that, within lower-income communities, gaining access to the Internet is exceptionally costly.
Naturally, this demands ISPs to balance the need to generate revenue with the imperative to provide affordable services. Luckily, there are ways for your ISP business to find a middle ground by dedicating yourself to providing exemplary service and support, uninterrupted coverage, package options to suit different needs, and increased availability in more areas.
Implementing flexible payment options
As ever-evolving as the ISP industry is, so are your customers’ needs, and at the helm of these is a seamless engagement with your business. Alongside expert customer support, offering your clients multiple payment methods is a surefire way of standing out.
A recurring challenge most ISPs face stems from relying on traditional or singular payment options. However, many potential solutions are allowing you to implement various ways to get paid.
Giving your customers the choice of paying for their fibre packages via an online payment gateway streamlines monthly billing. This also provides both you and your customers financial assurance. To expand your market diversity, consider adding prepaid and retail payment vouchers, such as Shoprite’s SCode or Flash’s 1Voucher, to your payment options.
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Aside from these, there’s much to gain from integrating various payment methods, such as monthly debit orders, credit card payments, and instant EFT. Remember that you’ll deal with everyone from private individuals to large enterprises, each with their preferential payment processes.
On the more technical side of things, think about upfront installation payments. These are billed separately to monthly subscriptions, and if you’re not offering convenient ways to settle the amount, you could lose customers. In this situation, incorporating a BNPL (buy-now-pay-later) method like PayFlex is an excellent solution.
Expanding services and product ranges
To keep up with the continuously changing landscape of technology is no easy feat, and as an ISP, to offer faster and more dependable services, you’ll need to expand and upgrade.
For many competitive ISP businesses in South Africa, this has meant adopting the selling of hardware alongside connectivity. Consider creating a catalogue of tech ranging from mesh networks to routers, repeaters, and range extenders to cater to this part of the market.
Beyond basic hardware, remember that your customers deal with daily struggles such as loadshedding and unplanned power outages. With South Africa’s unpredictable electrical supply, offer your customers alternatives to powering their devices.
South Africa faces immense infrastructure limitations, and you could get ahead of other ISPs by offering complimentary expansion options. These could range from UPS, backup power supplies, and mini-UPS systems.
Finally, invest in an online presence by setting up an eCommerce store, making purchases from customers easy and convenient.
Integration with third-party software
Another key to success that many ISPs are leaning towards is the power of integration with third-party software providers. These integrations allow businesses to modernise processes, streamline operations, and provide additional features without expanding in-house.
Among the many pioneering integration providers, Splynx allows ISPs to manage and shape traffic data to understand usage and customer trends better. Splynx allows for FUP management, CAP configuration, contentions, aggregations, queues for speed limitation, network monitoring, and network weather maps.
leading companies, such as SOLIDitech, have allowed ISPs like Cybersmart to improve their customer experiences and offerings, including superior sales and support services, professional quotations, clear and concise invoices, and enhanced order fulfilment times.
Gaining the upper hand within the ISP industry | Wrapped up
Although initiating clever commercialisation of your ISP might seem challenging, there are various ways to achieve increased success in a sector that’s never been more competitive.
The only question then is where to start.
With over 20 years of experience, Netcash is the preferred payment partner of more than 800 of South Africa’s leading internet service providers. And with innovative integrations with Splynx and SOLIDitech, you’ll always be one step ahead of the competition.
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Author:
Dieter Christoffels
ISV Account Manager
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Dieter is the ISV Account Manager at Netcash, leveraging his strong background in banking and payments to manage the company’s integrated software vendors. Dieter is passionate about exceeding customer expectations and believes that exceptional service is the key to building lasting relationships. He champions the “customer for life” philosophy and consistently strives to deliver an unparalleled service experience at every touchpoint.
