Move over MVNO, Say Hello to VNO

Back in December 2001, I wrote a piece called, Virtela Takes a Soft Approach to Fiber-Optic Networks. I suspected as bandwidth got commoditized and IP became a predominant protocol in the networks, we could see the emergence of a new breed of a carrier, Virtual Network Operator. Virtela, certainly has had a tumultuous history thus far, but the concept hasn’t. In Europe guys like Vanco, Sirocom and XB Networks are doing well. Strategic consultants Ovum see anecdotal evidence that VNO model has become a success, but scaling it to match bigger rivals is going to be a challenge. As IP proliferates, the main reason VNOs thrived – the pain out of the integration of MPLS-based services more efficiently than facilities-based providers – the carriers can simply offer similar services. In order to thrive, these guys might be better advised to team-up with IT services providers. Doing so they can challenge the networking service giants on their turf. As for Virtela, no idea about their revenues, but they were named one of the Deloitte’s 500 fastest growing companies this past December 2001.

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