Let’s take an honest look at the VNO License

As a low cost internet service, a VNO provides a lots of options. From ensuring that low cost setups can be established in small regions to providing a way for small business to grow within a virtual environment, acquiring a VNO license and becoming a Virtual Network Operator seems like a winning strategy.

But is it?

While there are many articles related to becoming a virtual network operator. Now all of them discuss the truth behind it. They are either concerned with the minute details of procedure or difficulty of presenting the required documents.

All those topics are important ones. But through this article, we want to take a step further. Let’s take an honest look at the VNO License. As we analyze its ups and downs, you can make an informed decision about getting the unified license for VNO. 

The main benefits of obtaining the VNO License

Let’s first discuss the points that makes getting the VNO license such an important prospect.

1. Cost effectiveness: Compared to your standard ISP center, starting a VNO is cost effective. It comes from the factors that involve government fees, the need for guarantees and hardware requirements. In simple terms, all these things are low when you are opting for a VNO instead of an ISP.
2. Reduced Network complexity: A Virtual Network Operator operates within a virtual environment, with less hardware involved. As a result, the complexity of the network it implements in small towns, states and even entire country is reduced.
3. Less time required to market: People’s imagination start to go wild even when they hear the term Virtual. And when you add “Network” and “Operator” into the mix, you have an audience to which you can easily market your product. When you’re paying the VNO License fee, you gain access to the next generation of ISP. It costs less and can provide more.
4. Low capital expenditure: Low CAPEX is desirable for any business. You don’t want to spend so much money into the capital that it outweigh the profits you can generate. A Virtual Network Operator, especially a category C VNO, has minimal CAPEX requirements. It all steps from low expenditure on the hardware requirements, all because of there is virtually no need of it.
5. More flexible than the rest: A virtual network allows the internet operator to make changes within the network without impacting the output to a damaging degree. Thus, it provides the added benefit of flexibility. So, if you want to quickly form a new network, you don’t need to move all the connected wires, just hop on screen and do the deed.
6. Reduced Market barriers: There was a time when the government used to be put deliberate roadblocks on the path of development. That’s not the case now. India’s new digital dream has compelled the administration to reduce the market barriers and relax the legal complexities associated with the VNO License.

The limitations of opting the VNO License

Let’s take a look if the benefits mentioned above are outweighed by the limitations mentioned below:

1. Limited scope: A VNO license is the new type of authorization for doing a type of business that’s barely out of its diapers. What do I mean? Operating a VNO is a new type of business. While there are many who are looking for subscriptions from a VNO, there are many who aren’t. The lack of desire to opt for change combined with the complexity of the VNO license procedure has limited its scope.
2. The competition is increasing: Ever since the government announced the official notifications regarding the VNO license, the market got flooded with Virtual network operators. Low cost internet services provided by a low cost and low maintenance hardware – what’s not to like. However, this tsunami has created increased competition. It forces you to be extra creating in terms of how you market your business.
3. Depending on infrastructure owners: A VNO doesn’t have an infrastructure, other than the virtual network it operators. Thus, it has to rely on ISPs for its infrastructure needs. And you and I both know that where there is dependency, there is disagreement. And where there is disagreement, the prospect of losing the business increases.
4. You can’t control the downtime: Because reliance Jio has turned most of us into internet addicts, we hate down time. Being dependent on others for hardware infrastructure, you lose the ability to manage downtime of the internet. The icing on this bitter cake as the face of the internet company, it’s you who your subscribers will hold responsible.

So, let’s now assess whether the benefits outweigh the downfalls.

1. The low infrastructural cost because you’re depending on other ISPs for infrastructure is a risk. However, you can easily mitigate it by drafting the right VNO License agreement.
2. The increased competition is not an issue. With so many digital marketing venues open to you, all you need is a bit creativity and you’ll generate leads hands over fist.
3. The scope is limited now, but in future it can increase. The increased competition suggests that soon, there will be more VNOs active in the frontlines, with ISPs taking a backseat.
4. While you can’t control downtime, you can work together with your ISP in establishing a network where losing subscribers even impacts the ISP. It would instil same fear that you have in the ISP you’re taking the resources from.

So, for argument’s sake, let’s for now say that you’d have more to earn from a VNO as compared to what you’d have for losing.

Conclusion

A virtual network operator is a new type of ISP without being an ISP. Being new, it has risks associated with it. That said, it’s through overcoming these risks and your fears that you can establish yourself as a successful Virtual network Operator. Want to remove your fears even more? Reach out to our VNO consultants. Talk to them about your issues and you’ll receive directions for what to do next.

Also read:  Benefits of Obtaining a Network License in India

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.