December 2000
Background Note
HBS Case Collection

Internet Access Providers

By: Thomas R. Eisenmann and Daniel Green

Format:Print
| Pages:23

Abstract

Describes the Internet access provider business model. First, it defines the model and presents different ways to categorize access providers. Second, it offers a summary of the various ways that Internet access providers create value for their customers. Next, it analyzes the economic models for access providers that charge a subscription fee and ISPs that offer free service, respectively, focusing on their revenue and cost drivers. Lastly, it examines the payoff to Internet access providers from pursuing a "Get Big Fast" strategy, i.e., investing aggressively in customer acquisition. How do access providers add value for consumers and reach profitability? How are the various technologies used to access the Internet--dial-up modems, cable TV, satellites, wireless phones--evolving, and what are the implications for access providers? What tradeoffs do access providers face in pursuing aggressive growth strategies? Lastly, will the access provider industry consolidate, leave only a few ISPs in the years to come, or will niche players thrive into the future?