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Ofcom Researches Smaller (Niche) UK ISPs

Posted: 25th Jan, 2007 By: MarkJ
Ofcom has today published the findings of its brief research into smaller (niche) UK ISP's:

The UK niche ISP market is made up of approximately 686 service providing businesses, of which:

  • 390 provide ‘Hosting, Connections and other services’

  • 224 provide ‘Hosting and other services’

  • 72 provide ‘Connections and other services'
In total, they claim to serve approximately 1.9 million customers (including both business and residential consumers) in the UK , and the estimated value of turnover is £1.15 billion per annum. The actual proportion of their turnover relating to Internet connections (i.e. connections via broadband / dial up and hosting services excluding all other services) is approximately £740m and niche ISPs that provide connections and hosting and other services serve approximately 1.3m customers (both business and consumer/home) in the UK.

In terms of the total market, Niche ISPs (irrespective of the type of services provided) serve approximately:

  • 30% of the total enterprises in the UK

  • 5% of UK households
According to the niche ISPs surveyed, 16% of all UK businesses and 2% of UK households have an internet connection service supplied by a niche ISP.

The vast majority (83%) of niche ISPs have less than 20 employees, equally split between technical and non-technical staff. 61% of ISPs have only one office location and tend to generate less than £1m annual turnover. Most of the niche ISPs approached are located in England and more precisely in the South (South East: 27%, London : 15% and South West: 7%).

In terms of types of businesses they serve, the focus is on smaller companies with one to 30 employees.

Niche ISPs offer internet connections, web-hosting and other IT services, as part of a tailored, consultative service to businesses.

Typically smaller providers also claim to offer a higher quality of customer care than their larger rivals. That’s debatable; although small groups of customers experiencing problems are less likely to bother a larger provider, where as a niche one would have to take notice.
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