Telecommunication

What is VO Virtual operator

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— 2 min read

VO (Virtual Network Operator): Reselling Network Services Without Owning Infrastructure

In the telecom industry, a Virtual Network Operator (VO), also known as a Mobile Virtual Network Operator (MVNO) for mobile services or a Fixed Virtual Network Operator (FVNO) for fixed-line services, acts as a service provider offering mobile or fixed-line network connectivity to customers. However, unlike traditional network operators (MNOs or FNOs) who own and maintain their own physical network infrastructure, VOs rely on leasing network capacity from established providers. Here's a detailed technical explanation:

The VO Business Model:

  • Core Concept: VOs essentially "rent" network resources like bandwidth and cell towers from MNOs or FNOs. They then package and resell these resources to their own customer base under their brand identity.
  • Benefits for VOs: This model allows VOs to enter the telecom market without the massive upfront investment required to build and manage their own network infrastructure. It offers greater flexibility and agility compared to traditional MNOs.
  • Benefits for Customers: VOs can offer competitive pricing plans or cater to niche markets, potentially providing customers with more affordable or targeted service options.

Types of VOs:

There are two main categories of VOs based on the type of network they provide:

  • Mobile Virtual Network Operator (MVNO): These VOs specialize in mobile network services, leasing network capacity from MNOs. They utilize the MNO's cellular infrastructure to provide mobile voice, data, and SMS services to their customers.
  • Fixed Virtual Network Operator (FVNO): These VOs offer fixed-line network services like broadband internet access or Voice over IP (VoIP) to customers. They lease network capacity from FNOs (Fixed Network Operators) who own the physical fiber optic cables or other fixed-line infrastructure.

Technical Considerations for VOs:

  • Network Access Agreements: VOs establish agreements with MNOs or FNOs for bulk access to network resources. These agreements define the specific services, bandwidth allocation, and service level agreements (SLAs) for the leased network capacity.
  • Service Delivery Platform (SDP): VOs typically employ an SDP to manage their customer base, billing, service provisioning, and potentially value-added services. The SDP acts as the bridge between the VO and the underlying network infrastructure leased from the MNO/FNO.
  • Core Network Services: While VOs don't own the core network infrastructure, they may need to rely on specific core network services from the MNO/FNO such as subscriber authentication, roaming services, or interconnection with other networks.

Advantages of the VO Model:

  • Reduced Costs: VOs avoid the high capital expenditure required for building and maintaining their own network infrastructure.
  • Faster Market Entry: With leased network capacity, VOs can enter the market quickly and focus on building their brand and customer base.
  • Flexibility and Innovation: VOs can be more agile in adapting to market needs and offering innovative service packages.
  • Increased Competition: VOs contribute to a more competitive telecom market, potentially driving down prices and improving service offerings for consumers.

Challenges for VOs:

  • Reliance on MNOs/FNOs: VOs are dependent on the underlying network quality and capacity provided by the MNO/FNO. This can limit their control over service quality and network performance.
  • Limited Network Control: VOs may have limited control over network upgrades or customization, hindering their ability to differentiate their services from the MNO/FNO.
  • Profitability: Finding the right balance between competitive pricing and profitability can be challenging for VOs, especially in saturated markets.

Future of VOs:

The VO model is expected to continue evolving with advancements in network virtualization technologies like NFV (Network Functions Virtualization). As network infrastructure becomes more software-defined, VOs might have greater flexibility and control over network functionalities in the future.

Conclusion:

VOs play a vital role in the telecom market by offering alternative service providers and potentially driving innovation. By leveraging leased network capacity, VOs can cater to niche markets or offer competitive pricing plans, providing consumers with more choices and potentially fostering a more dynamic and competitive telecom landscape.

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