How to start an RSP in Australia · Napkin 1, corner 1
Can I even legally do this?
Before you read a single regulation, answer one question. It decides your legal obligations, your capital, your margins and how much sleep you'll lose.
Before you read a single regulation, before you price a single plan, answer one question:
Are you going to build a network, or resell someone else’s?
Everything hangs off that answer: your legal obligations, how much money you need, what your margins look like, who you need to hire, how fast you can launch, and how much sleep you’ll lose. Most people never consciously make this call. They drift into one or the other by accident, usually because of whoever they spoke to first. Don’t do that.
What “resell” actually means
When you resell, you buy a finished service wholesale and put your name, your price and your support on it. Usually that’s an NBN service through an aggregator, a white-label voice product, or capacity on someone else’s fibre.
Your “network” is mostly a billing system, a customer portal and a support phone. The wholesaler runs the routers, the BNG, the transit, the NNI. You run the customer relationship.
That’s not a dirty word. Plenty of very profitable RSPs never touch a router. They’re brilliant at sales, service and niche markets, and they let someone else worry about BGP.
What “build” actually means
“Build” covers a big range, and the difference matters enormously:
Build your own core. Your own BNG, your own IP space and ASN, your own transit and peering, maybe your own direct NNI to NBN. You’re still buying the last mile from NBN or another access provider, but from the handoff onwards, it’s yours. You control routing, CGNAT (or not), static IPs, peering, and what happens when something breaks.
Build your own infrastructure. Fibre in the ground, towers, line links that reach customers. This is real carrier territory: a licence, a lot more capital, and a lot more regulation.
Most people who say “build” mean the first one. Very few should start with the second.
The differences, properly
| Resell | Build | |
|---|---|---|
| Legal | CSP: no licence, full consumer rules | Own infrastructure: carrier licence, levies, SOCI |
| Capital | Low, scales with customers | Spend before you earn |
| Margin | Thin, set by your wholesaler | Better at scale, brutal when small |
| Control | Their outage is your outage | Every fault is yours to find |
| Speed | Trading in weeks | Slow to launch, hard to unwind |
Legal
Resell, or build your own core on top of someone else’s access network, and you’re a carriage service provider (CSP). You don’t need a carrier licence, though a CSP registration scheme with ACMA is on the way. Either way, the full consumer protection framework applies to you from the first service you sell.
Own the network units that carry services to the public and you’re a carrier. That means a carrier licence from ACMA, carrier licence conditions, an annual licence charge, facilities and access obligations, security obligations under the SOCI Act, and the industry levy once you’re big enough. It’s a different league of paperwork and scrutiny.
Network
As a reseller, someone else’s outage is your outage. When their core falls over, your phones light up, and all you can do is log a ticket and wait in their queue while your customers tell you how useless you are. You can’t fix what you don’t control.
As a builder, you control routing, capacity, peering and fault-finding. You can make your network genuinely better than the next RSP’s. The flip side: every fault is now yours to find, and “the wholesaler’s looking into it” is no longer an answer.
Capital
Reselling is low-capital. Your costs scale roughly in line with your customers. You can be trading within weeks for the cost of a billing platform, a website and some legal work.
Building means spending before you earn. Routers, BNGs, colocation, cross-connects, transit commitments, NNI and CVC charges, all before customer one. You’re carrying capacity you haven’t sold yet, and the bill turns up every month regardless.
Here’s a rough ballpark for a single PoP in one region, built with everything in pairs so one failure doesn’t take you down. All figures are in Australian dollars, excluding GST:
| Up front | Cost |
|---|---|
| Border routers × 2 | $50,000 |
| BNGs × 2 | $65,000 |
| Switches × 4 | $50,000 |
| CGNAT routers × 2 | $50,000 |
| Out-of-band management | $5,000 |
| Firewalls × 2 | $30,000 |
| IPv4 addresses, a /24 (256 × $32) | $8,192 |
| Total | $258,192 |
Then the monthly bills: transit from a Tier 1 carrier at around $1.80 per Mbps, a rack in a Tier 3 data centre at around $1,200, cross-connects at about $120 each, and national NBN connectivity at around $5 per Mbps. That last one gets you to every NBN POI in the country from a single handoff in your PoP, which is what makes one PoP a realistic place to start.
The IP addresses are the one up-front cost that holds its value. Most upstreams won’t route anything smaller than a /24, so that’s your minimum, and you can sell the block later if you need to.
At 1 Gbps, that’s roughly $8,500 a month to run. Spread the hardware over five years and it’s about $12,650 a month all-in, before you’ve sold a single service. And that’s just the network: NBN’s own per-customer wholesale charges sit on top.
Margin
Reseller margins are thin and set by your wholesaler. When they put prices up, you either pass it on and look expensive, or eat it and look poor. You’re competing with everyone else buying the same wholesale product.
Builder economics are better at scale and brutal at small scale. Fixed costs don’t care how many customers you have. There’s a crossover point where building starts to pay, and it’s further away than most people think.
Here’s what that same PoP costs per customer, assuming around 3.4 Mbps per service in the busy hour (AUD, ex GST):
| Capacity | Services it carries | All-in cost per month | Network cost per service |
|---|---|---|---|
| 500 Mbps | ~150 | ~$9,250 | ~$63 |
| 1 Gbps | ~300 | ~$12,650 | ~$43 |
| 5 Gbps | ~1,500 | ~$39,850 | ~$27 |
At 150 customers, you’re paying more than twice as much per customer as you would at 1,500. Compare that with what your wholesaler charges you per service today, and you’ll see roughly where your crossover sits.
People
A reseller needs sales and support people, and someone who understands the wholesale product well enough to troubleshoot from the outside.
A builder needs all of that plus network engineers, on-call coverage, and at least one person who actually understands BGP and can be woken up at 2am. Those people are expensive and hard to find.
Speed and risk
Reselling is fast in and fast out. If the business doesn’t work, you’ve lost a lot less, and you can wind it down without a pile of hardware and contracts.
Building is slow to launch and hard to unwind. Contracts have terms, hardware depreciates, commitments are commitments. But if it works, you’ve built an asset with real value, and that matters when it comes time to sell.
Control and differentiation
A reseller mostly competes on price and service, because the product underneath is the same as everyone else’s on that wholesaler.
A builder can offer things others can’t: no CGNAT, static IPs, better peering, custom routing, real performance under load, and products the wholesalers don’t offer at all. That’s how small builders win customers off big brands.
The honest answer
For most people starting out: resell first.
Learn the customer side. Prove you can sell, bill and support. Get to a few hundred services and see what your real numbers look like. Then build the bits where control actually pays you back, usually your own core first, and a direct NNI only when the numbers justify it.
Build first only if you’ve got the capital, the engineering talent, and a clear reason why controlling the network is your edge.
That’s roughly how it went for us. Encoo resold AAPT for years, until interstate costs on multi-site networks pushed us to build our first POP in Melbourne. We sized it for three years and filled it in three months.
The legal bits, by stream
None of this is hard. It’s just quiet. There’s no welcome pack, and no checklist arrives in the mail. Most people find out a rule exists right after they’ve broken it, usually via a TIO complaint with a fee attached.
Everyone (resellers and core builders)
- ACMA registration (coming). CSPs have always been able to just start trading. That’s changing: a CSP registration scheme is on its way through Parliament. Once it starts, you’ll have six months to get on the CSP Register. [CHECK: whether the bill has passed]
- TIO membership. Join before you supply your first service, not after your first complaint. Complaints cost you money whether or not you were in the wrong.
- The Telecommunications Consumer Protections (TCP) Code. Sales, contracts, billing, credit management, changing providers. It’s long. Read it anyway. The same reforms will let ACMA enforce industry codes directly.
- The ACMA standards. Complaints handling, financial hardship, customer ID authentication. These are enforceable rules, not guidelines, and ACMA does enforce them.
- Emergency calls and the IPND. If you sell voice, 000 has to work, and your customer data has to be uploaded to the Integrated Public Number Database.
- Data retention and lawful intercept. You need to retain the right metadata, have an interception capability plan, and be able to answer when agencies come knocking. Resellers can often lean on their wholesaler here. Find out exactly what they cover and what’s still on you.
- Cyber incident reporting. Carriers and CSPs both have to notify the Australian Signals Directorate of cyber security incidents. Yes, even if you’re tiny.
- Record-keeping. If you can’t prove what you told the customer, legally you didn’t tell them. Keep everything: sales calls, contract summaries, consents.
Building infrastructure, on top of all that
- Carrier licence from ACMA, plus the licence conditions that come with it.
- Annual carrier licence charge, plus the Telecommunications Industry Levy once you hit $25 million in eligible revenue. Either way, you lodge eligible revenue returns with ACMA by 31 October each year.
- Facilities and access obligations. Land access rules, infrastructure sharing, and dealing with interconnection requests from other operators.
- SOCI obligations. The old telco security reforms (TSSR) now live in the Security of Critical Infrastructure Act, since April 2025. That means registering critical assets, managing security risk, and notifying government before network changes that could affect security.
What’s next
Once you know whether you’re building or reselling, the next question is how the traffic actually gets to your customers. Next corner: the pipes.