Virtual network operator Vanco is casting around for a financial lifeline after founder and CEO Allen Timpany jumped ship and it emerged that the company has spent much of a credit line it was thrown in January this year.

Barely two months ago, Vanco celebrated twenty years as a managed telecoms services provider at its AGM in Barcelona – a sparsely attended event in terms of customers presenting to the press, and one notable for customer complaints from the conference platform, as reported by sourcingfocus.com in March.

Vanco has built an apparently viable business on its knowledge of the global telecoms market and its infrastructure. That knowledge base – a virtual map of the global telecoms network – has plugged it into some 700 asset-based carriers (ABCs) and suppliers worldwide, from whose offerings the company chooses technologies and services for its customers.

So why is an asset-light, technology-neutral sourcer for telecoms and networking expertise in financial trouble?

At the AGM in Barcelona, this writer became concerned that Vanco's real asset was that invaluable and sophisticated map and database of the world's telecoms infrastructure, down to the granular level of a town or village's network profile – an asset which might have persuaded Vanco towards opening a lucrative consultancy line. Indeed, one senior manager said the company had been both tempted by the idea – and approached by a consultancy suitor, but had (reluctantly, in that executive's view, perhaps?) rejected the latter's advances. It would make sense now for such a suitor to step forward again and grab what most of the company's executives regard as its crown jewels.

However, at the AGM the CEO was emphatic. "We've had that discussion," said Timpany to sourcingfocus.com, "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,” he continued, “not in offering a consultancy service at a few thousand dollars a day."

Multimillion-dollar deals may have been the focus of Vanco's business, and yet the company owns but a small percentage of the potential Fortune 1,000 contracts. Meanwhile, Ovum reports that BT and AT&T have both done $1 billion individual deals in the past year. Vanco only won its first $100 million-plus contract in early 2007, after many years in the vanguard of the VNO concept.

At the AGM event, Frost & Sullivan analyst Sharifah Amirah, head of research ICT EMEA for the analyst, identified the SME market as being the source of 80% of telecoms growth in Europe over the next few years – surely a sign of commoditisation of supply. 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."

Indeed, it seems likely that this is what many large companies have done – telecoms, after all, is a market that is based on the known quantity and the familiar.

Also, with such a complex supplier network of 700+ companies spread across the globe, each carrier's SLAs must have impacted on the quality of service that Vanco has been able to promise customers with its own SLAs.

However, that is not to say that the virtual network operator (VNO) model is dead. Perhaps it will find a more profitable home within the familiar portfolio of a Fortune 1000 name?