redPIPE Blog

How much data do I need to ensure my customers stay online?

One of the biggest concerns any ISP or IT company has when providing Internet service to their clients is ensuring that their customers are being provided enough data to stay online, while also keeping costs at a minimum for the provider. This even includes enough data for your failover Internet service. But this is a fairly difficult balancing act to maintain, as is evident in a recent announcement by one of the country's largest Internet providers (Comcast). At a conference earlier this month, Comcast Executive Vice President David Cohen predicted his company would likely impose a limit on data (within five years' time) for customers, meaning any usage above a certain level would require an additional charge on the customer's end.

Why would a Goliath like Comcast impose such a limit? Because in today's digital age, consumers don't use the Internet strictly for reading documents. The web has become a multimedia Mecca, with streaming video services and interactive sites popping up daily. As more and more people use Netflix, Hulu, and other streaming services for entertainment, companies like Comcast need to dish out more data, while also taking the hit, financially, in the cable-focused areas of their business.

How much data is the right amount of data?

It's difficult to assess how much data a company needs to offer its clients, because the number can vary based on location, access, and interests. Most numbers suggest that an average user would be safe with 350 to 500 gigabytes of data per month, which allows the download or stream of 70 to 125 HD movies (each running roughly 4 -5 gigabytes in size). Of course, failover Internet likely doesn't need to provide quite that high an amount, as it's purpose is to supplement the main service.

But wouldn't it be amazing if you could offer a rather substantial amount of data to your clients - even for your backup Internet service - without taking a hit on your margins?

It can happen.

redPIPE resellers benefit from data pooling

Most Internet providers who become redPIPE resellers do so because of our reputation for reliable, fast, and streamlined 3G/4G/LTE failover Internet service. When all other Internet services fail (due to man-made mishaps or natural disasters), the backup Internet service provided by redPIPE remains intact. Best yet, as a reseller, Internet providers can repackage redPIPE's service under their own name and branding, while ending the practice of inviting their competitors to serve as backup providers to their customers.

But among the many added benefits of becoming a redPIPE reseller, is the benefit of being able to pool data between your clients. Data pooling serves two benefits. Firstly, you're able to dish out higher levels of data among your end users, and secondly, as a result, you can also increase your earnings as reseller.

Here's how the data pooling works.

Let's say you have 100 lines (or clients) that you provide Internet for. As a redPIPE reseller, you can provide 5 GB backup Internet to each of these clients separately. Your cost for this is $45 per line, while we suggest you sell it to your end users for $67.50 (giving you a profit of $22.50, per month, for each line). However, this only gives your end users 5 GB worth of backup Internet.

If, however, you chose to pool your data among your clients, you could set up 90 1 GB lines, in addition to 10 10 GB lines. When pooled across your 100 end users, you now can provide upwards of 190 GB to cover any kind of failover that occurs during the month. In addition, you could earn up to $29,000 in revenue at the end of the year (a $2,000+increase from the initial, non-data-pooling setup).

And let's say that the 190 GB that you offer in the example above is more than enough to cover your end users. Then you could choose to move five of your more expensive 10 GB lines to 1 GB lines (so now you have 95 I GB and 5 10 GB), which gives you the option of offering upwards of 145 GB of backup Internet data. This would then earn you nearly $35,000 in additional yearly revenue, while still providing your end users with enough backup data.

Providing enough data while earning revenue

No other opportunity exists that allows Internet providers to offer their clients a large amount of backup Internet (enough to cover their needs during an Internet failure), while simultaneously allowing for this type of additional revenue. With redPIPE, resellers are able to offer reliable service, no matter what catastrophe might hit, while adding to their margins.

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