Virtual network operator Vanco celebrated twenty years as a managed services supplier at its AGM in a mild and foggy Barcelona this week, barely five hundred yards from tens of thousands of Catalan football supporters who cheered the home team to a famous draw at the 'New Camp' stadium.

The event was attended by most of the company over several days – at the same hotel as the Barcelona football team. The conference was also, perhaps, a score draw, with one major customer (Vesuvius) saying Vanco's invoicing was "a nightmare" (subsequently blamed by Vanco's CEO on an Oracle accounting system), but others praising the company's disintegrated managed service approach.

Vanco has undoubtedly built a business on its knowledge of the global telecoms market. Its knowledge base – accessible in a cutdown version via vanconetdirect.com, minus the company's value-add services – is a virtual map of the global telecoms network, and plugs Vanco into some 700 asset-based carriers (ABCs) and suppliers worldwide.

From those offerings Vanco picks and chooses technologies and services for its customers. In short, Vanco has positioned itself as the asset-light, technology-neutral sourcer for telecoms and networking expertise.

Wayne Churchill is MD of Vanco Direct (formerly the VNO division), and he claims that for any town or village in the world, his company can list available carriers and map their services, literally, onto customers' needs. They both work for, with, and compete against major carriers such as BT and AT&T, and reprice and rescope their offerings.

Surely with such a valuable intellectual asset at their disposal, for which a variety of front ends can be built (such as the company's global telecoms network map), Vanco must be tempted to move into consultancy? "We might provide a price to a client, but we don't give them the underlying data," said Churchill. "We have a unique resource, but consultancy is not a strategic direction or model for us."

But surely the company must be an obvious acquisition target for the major consultancies – particularly as the intellectual property aspect of their business is a solid hedge against the commoditisation of telecoms services? "We've been approached. I can't say [by] who at this time," said Churchill.

CEO Allen Timpany rejected the suggestion: "We've had that discussion," he said, "but we don't wish to monetise it [the database]. We would do a 'white label' service through the web portal [vanconetdirect.com], but minus the services and at a lower margin and a lower price.

"Our consulting team's value is in landing a multimillion-dollar contract, not in offering a consultancy service at a few thousand dollars a day."

Mark Thompson, CEO Vanco Solutions added: "It is an asset but you don't sell the crown jewels." Despite that, Thompson said he liked the idea of "Amazon thinking for the telco marketplace".

Multimillion-dollar deals are certainly the focus of Vanco's business, which is targeted at Fortune 1,000 companies, of which customer base they own a small, but growing, percentage – the largest in the VNO field.

That said, Frost & Sullivan analyst Sharifah Amirah, head of research ICT EMEA for the analyst firm, identified the SME market as being the source of 80% of telecoms growth in Europe over the next few years – surely a sign of the commoditisation of the supply. Does Vanco see the SME market as a viable option?

SMEs: Fool's Gold

CEO Timpany slammed the idea: "The SME market is a fools' gold thing. The numbers look impressive if you listen to the analysts, but doing it effectively and making money is almost impossible, as they can get a better service from local suppliers."

Vanco Direct's Wayne Churchill added: "The SME market is incredibly hard to address. Every major company has pulled out of that market. If you're selling into it, then the people time and design time and the costs are the same, but the return is much smaller. We haven't solved it yet, We need a salesforce to address that."

Like many companies both inside and outside their space, Vanco sees wireless technologies as sweeping away the monopoly of the fixed line providers. Although Vanco is neutral about the technology, as those decisions are based on customer needs and supplier portfolios, presentations from the conference floor suggested the company is betting on WiMAX winning out over 3G.

In conversation, Vanco UK MD Andy Sumner said: "It doesn't matter to us which ones win."

Vanco Direct's Wayne Churchill was more forthcoming about the technologies: "We think WiMAX will dominate access to core networks. It's inherently more flexible and robust. The problem is the investment. A lot of big players lost their shirts last time [Churchill is referring to the purchase of 3G licenses]. But WiMAX isn't reliable in the sense that you'd bet your company data on it. In the UK it's good. In California it's amazing."

"We don't need to understand how the carrier architects it, we just need to know what it can do," countered Sumner. "I just want to know what infrastructure I can buy, which carriers operate where, what their points of presence [PoPs] are, and what their quality of service [QoS] is."

For such a company as Vanco, QoS and service level agreements [SLAs] are everything. With such a complex supplier network of 700+ companies spread across the globe, surely each carrier's SLAs must impact on the quality of service that Vanco can promise customers with its own SLAs? "Every other part of the telecoms world is about the data asset," said Vanco Direct's Churchill. "For us, some of the service is a utility, the rest is a service. We buy it like a commodity.

Vanco slams suppliers

"SLAs don't tell you anything except how brave the marketing people are," continued Churchill, "they don't tell you about the strength of the [carrier's] infrastructure. Verizon's infrastructure is crap [sic], but they have a great SLA. T-System has a Rolls Royce of an infrastructure, but no SLA. We build our own SLA across actual data we know we can measure."

Vanco Solutions' Thompson added: "You can have a supplier whose service level deteriorates; they lose interest in a company, or their business model changes. We certificate our suppliers. We have short-term contracts.

"For example, when the WorldCom thing happened, our recommendation to our customers [at the time] was to move off WorldCom. We tailor our SLAs to the business aspects, not to the technical. It's about how you drive that through the company.

"It's easier to buy everything from one supplier, but we don't because it's not the right answer. It is harder."

One market that is driving Vanco's business with customers in the UK is corporate home users. The company revealed that most of its client base in the UK is now geared towards home corporate working, where employees are connected to the corporate network from within the home for heavy, rather than occasional, use.

Sumner explained that by far the prevalent trend in the UK is for companies to integrate their corporate networks with employees' home hubs and domestic broadband connections. This could have implications for the future of customer call centres, he said, such as the uptake of 'homeshoring' (the building of virtual call centres of home-based employees as a competitive, locally based alternative to offshore services).

“[Homeshoring] does make sense,” said Sumner. “An inhibitor to that would be the ability of DSL to deliver class of service. It would need to be of sufficient quality for call centre work. We've integrated voice and data across standard DSL and the results have been good. The barriers are falling away.”

Thompson of Vanco's Solutions division, added: “Corporate home users are a big uplift for us. A very big uplift. Most of our 200 global networks have a reasonable degree of home corporate users.

“It won't be long before the traditional call centre ACD will come together with IPT technology. That's maybe five years ahead. The impetus would be both cost and quality of service.”

However, Vanco founder and CEO Timpany poured cold water on the idea that the spread of wireless technologies will deliver free internet access in major cities. “I don't think it's going to happen. I believe it will go the other way,” he said.

“Chicago canned it because it didn't pay. It's a case of who pays and how do they pay. When the [telecoms] business became deregulated and more competitive companies had to start charging for the local loop. In Scandinavia they are looking at increasing the cost of internet access for high-bandwidth users.”