Ofcom publishes review of niche ISPs

At the request of ISPA, the watchdog has completed its review of the smaller ISP market, the data from which will provide greater clarity and understanding of where support is needed.

Niche internet service providers, although often overlooked as small fry compared to the bigger players, deliver some type of offering to 30 per cent (more than one million) of UK businesses.

So says Ofcom, who yesterday published the findings of its niche ISP research, which will help provide greater market clarity against the backdrop of other ongoing consultations.

The perception of who smaller ISPs are and what they do frequently overshadows the role that they actually play in the market, a key reason that prompted the UK net trade association, the Internet Services Providers' Association (ISPA UK), to request that Ofcom conduct the review.

Small in stature but big en masse, there's around 700 niche ISPs in the UK, collectively raking in 1.15 billion in turnover each year.

It is often thought that the smaller players are more at home providing services to consumers, but the figures prove otherwise.

Compared to a business customer base of 30 per cent, niche ISPs provide services to just five per cent of consumers.

Drilling down to specific services, Ofcom's review found that niche ISPs offer broad portfolios encompassing everything from internet connectivity and web hosting to consultancy.

Interestingly, the study revealed that 16 per cent of businesses and two per cent of households use a net connection supplied by a niche player.

More than half (54 per cent) of the niche ISPs surveyed by Ofcom believe that their approach to service provision, which involves more targeted, bespoke offerings, put them at an advantage over the bigger players.

A spokesperson for ISPA said that Ofcom has responded well to its request for a review and that it was pleased with the findings as they helped add weight to its argument that niche and smaller ISPs need to be recognised and supported by the watchdog.

"[In light of the] strategic telecoms review this sort of data is absolutely integral to our understanding of the internet and telecoms sector in the UK," he said.

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