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MULTI-NETWORK OPERATORS - A closely tailored approach
Designing solutions based on specific customer requirements sounds like Nirvana for telecoms users. Chris Britton explains how Multi-Network Operators are aiming to fulfil the dream
Historically, corporate customers were compelled to rely on incumbent public
telecoms operators (PTOs) for their telecoms services. Now, an increasingly liberalised
telecoms sector has led to fierce competition among both established telecommunications operators and newcomers, which is delivering choice and improving quality of service and price benefits across the majority of markets.
In this deregulated telecoms world, a new type of company has emerged – the Multi-Network Operator (MNO). Unlike traditional, network-centric telecoms operators, MNOs do not own the infrastructure over which their services are provided.
Instead, they design tailored solutions based on their customers’ specific communications requirements, using an optimal combination of telecoms networks and technologies. Relying on their skills, experience, service management capabilities and partnerships, MNOs bring added value to enterprise customers, as well as to their network infrastructure partners.
So why is the term ‘multi-network operator’ used here in preference to the more familiar ‘virtual network operator’ (VNO)? The key reason is that MNOs understand there is nothing ‘virtual’ about their customers’ networking requirements.
Regardless of the underlying infrastructure, MNOs take full responsibility for designing, implementing and managing network solutions. Indeed, while some traditional telecoms operators offer different service levels depending on whether a solution is ‘on-net’ or ‘off-net’, MNOs approach service level commitments more from an end-to-end perspective.
The term, Multi-Network-Operator, highlights the way MNOs use their expertise, skills and tools and solutions to find the optimum mix of network technologies on their customers’ behalf. They do this via multiple routes, from multiple sources and across multiple geographies, before integrating the disparate components and operating them as a single solution.
MNOs also differentiate themselves from VNOs via their product focus. VNOs have previously concentrated on virtual private network (VPN) solutions, which involve connecting multiple sites using shared Internet infrastructure. While not ignoring VPN services, MNOs focus on delivering high capacity, custom-built network solutions using dedicated leased line, optical fibre and Ethernet technology, which they manage 24x7.
MNOs believe that business customers have become accustomed to receiving substandard service from traditional telcos and are crying out for significantly higher service levels for their wide area networks. It is a sad fact that there are now whole industries – such as telecom expense management and outsourced service level management – that exist because customers feel the need to ‘police’ the traditional telco model.
MNOs represent a more customer-service driven approach. In this respect, they offer several key benefits over single carriers operating alone.
Traditional telcos are inevitably focused on maximising the utilisation of the network infrastructure they own. Everything they do – the way they price services, target customers and select technologies to offer – is geared towards squeezing as much value as possible out of that capacity. In contrast, MNOs are constrained by neither the fiscal nor the physical limits of a single network.
This is an important advantage when servicing the needs of large corporates. The ongoing globalisation of industry means that enterprises increasingly need their networks to provide services to all parts of the world. Consequently, they are looking for end-to-end solutions that will almost certainly demand a combination of the network facilities of carriers in their home region with providers operating in territories across the globe.
By managing multiple networks instead of relying on one provider with a limited footprint, the best MNOs enable customers to expand their business network into new markets and remote, hard-to-serve locations faster and more cost-effectively than ever before.
The MNO approach can also offer increased choice and flexibility for customers in other ways. Rather than focusing on maximising capacity in one particular network, it concentrates on delivering the combination of network technologies that best suit the business needs of the specific customer. Once this is decided, the MNO can concentrate on putting these networks together as a seamless whole and managing them to a single service level agreement.
In addition, MNOs can help their customers to achieve lower total cost of ownership by reducing the hidden costs of using a traditional telco. Again, the best of these operators will adhere to robust global service level agreements, provide a single point of contact for multiple vendor solutions and deliver accurate, easy-to-understand invoices to customers.
Leading MNOs also have the expertise to integrate multiple transport and networking technologies ranging from private line to satellite and from IP-VPN to Frame Relay, coupled with the experience to deploy solutions that combine fixed broadband, managed mobility and secure site-to-site connectivity.
MNOs’ in-depth understanding of their customers’ business also enables them to offer consultancy as enterprises migrate to triple play solutions and next generation technologies like Ethernet and multiprotocol label switching (MPLS) and are faced with the need to integrate and interconnect increasingly disparate environments.
For the MNOs, committed to providing the best possible networking solutions for their customers, the move to these fast and efficient new networking technologies is inevitable and to be welcomed. And they are much better placed than carriers to provide an effective migration strategy.
This is because unlike carriers, they do not own the network infrastructure and therefore they have no financial stake in the embedded legacy environment. Effectively, they take on the role of reseller of network capacity and services. For these reasons, they are much more likely to prioritise the need to migrate customers to new technologies.
The MNO approach can also provide both network “route” diversity and vendor diversity. Many enterprise customers today see this as a critical requirement to ensure that their networks are both reliable and highly cost-effective.
Leading MNOs will be able to use network design tools to identify diverse, alternative transport routes to eliminate network ‘single-points-of failure', while drawing on a portfolio of wholesale carrier relationships to give customers an immediate and cost-effective second or third carrier option.
But it is not only customers that benefit from the MNO approach. More and more facilities-based telecom carriers are actively looking for opportunities to work with MNOs because they recognise that the MNO can be a strategic sales channel for their wholesale efforts, allowing them to support customer requirements they would otherwise never have been able to fulfil.
Increasingly, the MNO model is attracting telecom industry leaders. GTT is a good example of this, with several members of its board boasting leadership experience with companies such as Sprint, AT&T, Equant and Nextel. These executives recognise the value of the MNO’s service-driven, customer-centric approach. They understand there is category of business customers that needs a more closely tailored approach to their wide area network requirements.
They also recognise the market trends driving the adoption of the MNO model: enterprises are more global in focus; they are moving into new, hard-to-serve markets and they want greater network diversity to address business continuity concerns. Having seen the strengths and the limitations of traditional telcos, these executives appreciate, perhaps better than anyone else, that the time is right for enterprise customers to consider the MNO approach.
Certainly, the prospects for MNOs appear positive. Armed with a business model that addresses today’s telecom environment, MNOs can offer enterprise customers a range of benefits that are beyond what most traditional telecoms carriers can provide. Equally, this realisation is beginning to attract senior executives who have previously played key roles within large operator organisations to take a more active involvement in the new MNO model. With the current rapid rate of technological change making flexibility and diversity of product offerings more compelling and with the complexity of the market making the single point of contact that MNOs provide more attractive, the future looks bright indeed.
Chris Britton is Executive Vice President EMEA, Global Telecom & Technology
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