Survey: Smaller ISPs Fighting to Remain Independent

A new survey conducted by Bay area consulting firm Executive Strategies found that small- and medium-sized ISPs are fighting to remain independent in spite of increasing competition.

The survey of over 600 ISPs found three-fourths of the respondents said they feel they have enough resources to compete. When asked if they expect to be in business 3 years from now, 85% said yes. And by a margin of 3 to 1, those polled said that although they think that consolidation within the industry will continue, they expect to remain unaffected.

To expand their business, 75% of these ISPs indicated their top priority was advertising and development of new channels, and 50% of the respondents will continue to push for new products and services.

Geographic expansion was the third most sited growth strategy; 24% of the
respondents said they are planning to expand both regionally and even
internationally. This places small- and mid-sized ISPs in competition not only with the national firms, but with smaller peers as well.

Those surveyed also viewed business risks to be on the rise. Top ranked
risks were: competition from larger outfits (38%), cable modems (29%), and
increased government interference (24%). Further down the list was the
ability to hire/retain competent staff and predatory pricing.

Strategies needed to remain competitive included “flexible pricing”
(33%), investment in new technology (28%), and a continuation in service
improvements (24%). Translated, these figures seem to imply that smaller ISPs want to remain competitive in pricing despite increasing technology and service costs.

In some cases as often as once a quarter, about 9 out of 10 ISPs surveyed said they have been approached to sell their company. If the price were right, 77% said they would sell.

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