VNOs – Revenue and Growth Opportunity

Published: 2 Jun 2006

By Maria Zeppetella, Senior Analyst, Communications Services, ICT

After being largely off the radar, Virtual Network Operators (VNOs) are claiming a measure of success—yet another sign the telecom industry is finally rebounding after a long downturn. VNOs are so labeled because they generally do not have any infrastructure of their own. However, they provision network services to carriers, IT outsourcers, and enterprise customers by utilizing the services of numerous wholesale carriers, on local, regional, national or global basis. Having the flexibility to shop among multiple carriers to meet client requirements, VNOs are able to deliver a selection of services at competitive prices. Theirs is an enticing value proposition: a customer that might have to use multiple carriers around the globe now only has to deal with one provider, the VNO. There are currently only a handful of VNOs, but all claim high margins and an expanding customer base.

The first, largest and oldest is Vanco, which has been in existence since 1988 when CEO Alan Timpany purchased Vanco, an unprofitable data-services company for £1. Timpany’s mission was to make Vanco the first Network Service Provider without its own infrastructure. Vanco succeeded, and its services now include:

  • Data services (such as MPLS Matrix, which integrates MPLS paths from multiple service providers and supports CoS and end-to-end SLAs);
  • IPSecure, (IPSec with SLAs)
  • Hybrid – incorporates multiple technologies;
  • Converged services (VoIP)
  • Remote access;
  • Security services.

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