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Network: Seek a Net profit by becoming your own ISP

Why be just another Web surfer when you can be your own Internet company? Stephen Pritchard reports on an Easynet package that turns punter into service provider.
Brian Mulligan is one man who thinks small Internet service providers have a future. In fact, as managing director of Easynet, he is fostering their growth, even though they compete with his own firm for subscriptions.

Mulligan knows that the odds are stacked against small companies that want to become ISPs. The investments in technology, know-how and marketing are simply too great. "There are a lot of ISPs out there, and it is difficult to offer unique selling points," he suggests.

But instead of distancing Easynet from the small fry, Mulligan is encouraging them. The company wants small organisations, from computer dealers to football clubs, to become miniature Internet companies.

For pounds 9,000, you can buy an off-the-shelf Internet package from Easynet that supports 50 subscriptions. The Virtual Internet Provider service includes access to Easynet's phone or ISDN lines, modems, Web servers, backbone and technical support. There's even a CD-Rom, with all the software a user needs to go online.

Customers need never know that the service comes from Easynet. A serial number unlocks the CD-Rom and takes the subscriber to a customised home page. Easynet supplies its clients with billing information, and VIPs can put their own branding on the Web site, bills, and even the CD-Rom, if they want.

To break even in year one, the DIY Internet provider would need to sell the 50 subscriptions at pounds 15 each, which is rather more than the going rate. But there are other ways to make money. Extra subscriptions will cost less, and VIPs can charge for Web space, or added-value services. The VIP also receives a domain name, and "unlimited" Web space for its own use, both of which cost money on the open market. As Mulligan suggests, it is a way for companies, charities or clubs to subsidise their own Internet needs.

Mulligan concedes that Easynet is helping people to compete with its own dial-up services, although he points out that the main markets - computer dealers, value-added resellers and distributors, on the one hand, and clubs, societies and charities on the other - are not part of the mainstream market.

There is a strong commercial logic, too. Easynet is effectively selling its access time up front. It is down to its VIP customers to sell on the subscriptions: Easynet is paid, whether they do or not.

One of the greatest costs in any Internet service is getting new customers. Winning dial-up customers is the most expensive of all, when the money spent on signing them up is set against the revenue they bring in. Easynet has pulled off a neat trick by letting someone else - its VIP clients - do the marketing, while it concentrates on the technology and the infrastructure.

Easynet is not, Mulligan stresses, pulling out of the dial-up Net market. But clearly he sees its future as a wholesale supplier, whether of leased lines, Web space, or the Virtual Internet Provider package. "Most of the dial-up market will go through third parties," he admits.

The company has two other initiatives that suggest that selling Internet accounts to the public is no longer its main focus. Easynet is building a "web farm" were companies can host their pages, either on Easynet's servers or on their own hardware, managed under contract by Easynet. Mr Mulligan expects even heavy Internet users to look at this option. Internet design companies are one target group.

Easynet has also recently won a telecommunications licence. This means the company can sell voice services alongside the Internet. Brian Mulligan sees his company's future as an integrated telecommunications company. Easynet did not bid for the telecoms licence just to be able to offer lines into Internet users' houses or offices. "We are interested in voice, and in broadening our services," he says.