How Web3 Reshapes the Telecommunications Industry?

In the wave of global digitalization, traditional telecommunications operators are facing severe challenges. The large-scale deployment of 5G networks requires massive investments, but the revenue model has yet to break through, falling into the dilemma of competing in a saturated market. Data shows that the profitability and market value of top telecommunications companies are only about one-third of that of internet giants, reflecting investors' concerns about the growth potential of this capital-intensive industry.

The telecommunications industry has been exploring ways to transform itself. Previous attempts such as virtual operators and international expansion have not fundamentally solved the problems. It now seems that blockchain and Web3 technologies may bring new opportunities to the industry by reconstructing communication networks into value exchange networks, thereby creating new development space for the telecommunications sector.

The Predicament of Traditional Telecom Operators

The business model of traditional telecom operators is centered around communication infrastructure, generating profits by providing connectivity services, value-added services, and industry solutions. However, this model faces multiple challenges:

1. Decline in basic business revenue: Traditional voice and SMS services are being replaced by OTT applications, forcing operators to enhance user stickiness through bundling sales and other methods.

2. Pressure of heavy asset investment: The construction of 5G networks and spectrum auctions have increased capital expenditures, with global operators investing over $300 billion annually.

3. Competition in the stock market intensifies: User acquisition costs remain high, with terminal subsidies and channel expenses accounting for a large portion of marketing expenditures.

4. Cross-industry competition intensifies: Satellite broadband services like Starlink and edge computing services from cloud providers pose a challenge to traditional operators.

In the face of these challenges, operators are seeking breakthroughs from two directions: technological upgrades and ecological reconstruction. On the technological level, network slicing and edge computing have become key. In terms of ecosystem construction, operators are attempting to transform from "pipes" to "digital service engines." However, these efforts have yet to reverse the industry predicament.

The Possibility of Web3 Restructuring the Telecommunications Industry

Blockchain and Web3 technologies bring brand new reconstruction opportunities to the telecommunications industry, promising to upgrade communication networks to a fundamental value exchange layer. Specifically:

1. Infrastructure level:

• Tokenization of physical network resources enables distributed sharing
• Spectrum resources are governed by DAO to improve utilization.
• Decentralized Identity ( DID ) solutions enhance user privacy protection.
• The blockchain data market allows users to earn data revenue.

2. Cross-border Services and Settlement:

• Blockchain technology reconstructs international roaming settlement, significantly shortening the settlement cycle.
• The DeFi model introduces a fee system, allowing users to obtain discounts through staking.
• The combination of edge computing and blockchain gives rise to autonomous device networks.

3. Innovation of Economic Models:

• Deep integration of communication and finance, users can earn income by sharing resources.
• DeFi mechanism derivatives communication insurance, cross-chain roaming and other innovative services
• Smart contracts automatically execute cross-border settlements, reducing costs

Web3 Decentralized Telecom Operator Roam Case Study

Roam is committed to building a global open wireless network that enables seamless, secure connections between humans and smart devices. Its main features include:

1. Build a decentralized communication network based on the OpenRoaming™ Wi-Fi framework, while also integrating eSIM services.

2. Over 1.7 million nodes in 190 countries worldwide, 2.3 million users, and an average of 500,000 network verifications per day.

3. Combining OpenRoaming™ technology with Web3's DID+VC technology to achieve seamless connection and end-to-end encryption.

4. Encourage users to participate in network co-construction and earn token incentives by sharing Wi-Fi nodes and other methods.

5. eSIM service covers over 160 countries, providing users with flexible global connectivity solutions.

6. Diversified incentive mechanisms allow users to earn global data traffic or tokens through various means.

The Roam model demonstrates how Web3 is restructuring the telecommunications industry, achieving a unification of decentralization, globalization, and user incentives.

Communication-based Value Exchange Network

The core of Web3's reconstruction of the telecommunications industry lies in upgrading communication networks to value exchange networks, achieving a trinity of information, value, and trust transmission. This transformation will bring:

1. Improved information transmission efficiency: Blockchain technology can significantly enhance communication efficiency in scenarios such as cross-border payments.

2. Connecting Boundary Expansion: Providing inclusive financial services for remote areas and IoT devices.

3. Trust Mechanism Reconstruction: Blockchain-based "on-chain banks" can provide decentralized financial services.

The future may give rise to new forms of financial services such as global instant settlement networks and AI autonomous financial entities.

Conclusion

The telecommunications industry is undergoing significant changes. In the future, a hybrid model of "centralized infrastructure + decentralized services" may emerge:

• Basic telecommunications operators continue to manage physical layer infrastructure but open network capabilities through APIs.
• Service operator ( such as Roam ) is building a global value routing hub based on communication networks and blockchain technology.
• Users transition from passive consumers to ecological builders, promoting the development of the Web3 communication ecosystem.

This new type of communication network is expected to become the digital foundation for new forms of social organization such as Network State in the future, opening up new development space for the telecommunications industry.