In an industry filled with telecommunications giants like Bell and Rogers, small-scale Internet companies in Ottawa are setting their sights on niche markets in order to remain competitive.
Senior citizens and those living in rural communities have become the target demographic for local Internet companies such as Storm Internet and National Capital FreeNet (NCF) as they struggle to compete with Internet heavy weights.
“You have to be nimble. You have to beat them at their own game sometimes and you really have to prove your differentiating points,” said Dave Chiswell, CEO of Storm Internet. “It’s not difficult, but it is definitely a daily concern and a daily focus.”
To gain a competitive edge, both Storm and NCF have tailored their services to better suit the customers that depend on them most. For Storm, it’s those who live in rural areas where Bell and Rogers Internet is not available. And for NCF, it’s senior citizens.
Through a network of towers, Storm offers high-speed wireless Internet using radio frequency waves to all of Lanark County. This allows the company to offer Internet in areas that don’t have Bell phone lines or Rogers cables installed.
“Our strategy is let’s continue to grow where Bell can’t, and provide awesome Internet service there,” Chiswell said.
NCF, on the other, hand distributes its wireless Internet throughout the National Capital Region, where Bell and Rogers own most of the market. Like many small-scale Internet companies, NCF resells digital subscriber line (DSL) Internet through Bell’s telephone lines. But, it also offers in dial-up Internet, which makes the company a favourite among seniors.
“They’re just comfortable with this very simple interface. They’re just doing some basic email, they’re not trying to do any YouTube or anything like that, so they’re happy with the dial-up,” said Ross Kouhi, NCF’s executive director.
While many companies ditched dial-up a decade ago, NCF saw a need and capitalized on it. A not-for-profit company, NCF was started at Carleton University in 1993, and still rents a room at the university to house racks of servers and modems allowing it to run its dial-up service across the city.
Both Kouhi and Chiswell say servicing a small area comes with perks like face-to-face customer service, no contracts and high bandwidth caps. Its customers are responding well.
Gord Lamb, a 21-year-old university student, switched to NCF from Rogers after he was tired of paying $40 each month in additional charges for going over his bandwidth cap. His Rogers bandwidth was capped at 60 gigabytes, making it difficult for him to download movies and stream music without paying additional fees. With NCF, his bandwidth is capped at 300 gigabytes.
“It’s definitely a major benefit,” he said.
Higher bandwidth caps help both Storm and NCF combat the most threatening feature of telecom giants: the bundling package. Because Storm and NCF specialize solely in Internet service, switching to companies that offer multiple services is the biggest reason loyal customers stray.
“It hurts we can’t bundle our services with TV or home phone,” Chiswell said.
“But we’ve seen customers who have been on our wireless service, then they get a Rogers Wireless or Bell bundling package in the mail, and they switch to them. Two to three months into that service they get a multiple usage charge for over $100 dollars because they signed up for Netflix that month and started watching Mad Men or whatever, and usually they come back to us because of our data caps.”
Kouhi has also noticed the trend.
“In a way, Bell and Rogers are actually our biggest advertisers,” he said.