broadband prices fall, entrepreneur adapts with
predict dial-up Internet access will go the way
of black and white TVs in 10 to
Yet Houstonian Vivek Dave expects to sell more
of it for a paltry $5.50 a month. And he wants
his company, 550Access, to have 10 million customers
hawks a service akin to a stripped-down version
of AOL, targeting users who just want to check
e-mail or surf the Web and not use Web space,
news groups or other extras.
pay for a buffet when you only want an appetizer?"
the buffet is getting cheaper.
broadband prices dropping — SBC this week
announced $19.95 broadband services with the purchase
of a specific calling plan — the switch
will likely happen sooner than later.
low-cost ISP market, where service is priced below
$20, will swell to 23.1 million users by 2008
compared to 18.5 million users this year, according
to Jupiter Research.
after the short-term growth, the low-cost market
will also border on extinction by 2015, said Joseph
Laszlo, a senior analyst at Jupiter.
transition is bound to take place to broadband,
where it will stop making sense for consumers
to go to dial-up," he said.
realizes that users will eventually grow out of
or skip dial-up no matter how low the price goes.
By then he hopes to break into the broadband market
and leverage his client base.
dial-up users are tomorrow's broadband users,"
he said. "We will have to get into that line,
Making revenue elsewhere
Most low-cost ISPs also make their money elsewhere.
Houston-based Everyone's Internet, for instance,
sells dial-up Internet for $10 but makes about
half of its money on Web-hosting services. It
plans to offer $20 wireless broadband early next
25, Dave has already tried his hand at three businesses,
one of which spawned 550Access.
he was 20, and a marketing major at the University
of Houston, he joined a business that peddled
telephone, satellite and security services.
was something I wasn't very good at," he
followed that with a business that paid Web users
to surf the Internet using a toolbar that displayed
ads. Then the tech bubble burst, and ad revenues
then co-founded VIP PowerNet, which helps nonprofits
raise money by contributing a percentage of the
monthly fees to charity. But the business needed
to be more competitive, so Dave launched subsidiary
550Access to sell low-cost Internet access to
consumers, small businesses and municipalities
that didn't have the funds or infrastruc-
ture to go with broadband.
in 2003 the business started selling Internet
service at the wholesale level to other small
businesses under the name modempops.com, which
also provides consulting and software to businesses
looking to start their own Internet services without
the fuss of setting up infrastructure.
Partner sees a success
Amid the growth, Dave took a break from school
and is now finishing his degree online.
won't disclose the revenues or income, but he
says 550Access has maintained margins of 15 to
mentor and silent partner, Dinesh Shukla, 50,
runs a real estate business and says he says he
got involved with Dave because he saw a chance
to help the nonprofit community.
been pleasantly sur-
prised by the business's growth.
business, not everything is about making money.
There's satisfaction and that's worth a lot to
me," he said. "But 550Access has been
doing well because we have a good product. And
there is still a growth opportunity there."