The Transformation of Communication Networks: Blockchain Reshapes the New Blueprint of the Telecom Industry

In the wave of global digitalization, traditional business models in the telecommunications industry are facing severe challenges. The promotion of 5G technology has caused enormous investment pressure, but the revenue model has not improved, and value-added services have yet to break through, leading to competition in a saturated market. Data shows that while the revenue of leading telecommunications companies in the United States is higher than that of internet giants, their profitability and market value are far less than the latter, reflecting investors' lack of confidence in the industry.

The telecommunications industry is striving for transformation. In the past, attempts by virtual operators failed to address fundamental issues. Currently reflecting on this, the global roaming scenario of eSIM is actually very suitable for implementation through Web3, and can leverage Blockchain to promote value-added services. This article will explore the reconstruction plan of the telecommunications industry through Blockchain and Web3 operating models, as well as the impact of upgrading communication networks to value exchange networks.

1. Traditional Telecom Operator Model Facing Challenges

Traditional telecommunications operators focus on communication infrastructure to profit through connection services, value-added services, and industry digitalization solutions, forming a three-layer architecture of "connection + ecosystem + service". Basic communication services remain the main source of revenue, but traditional voice and SMS revenues are shrinking. Value-added services have become a new growth point, such as cloud services and the Internet of Things.

In terms of costs, operators face dual pressures of heavy asset investment and refined operations. The construction of 5G base stations and spectrum auctions drive up capital expenditures, with global operators' annual investments exceeding $300 billion. The competition for market share in the existing market is costly, with terminal subsidies and channel commissions accounting for more than half of the marketing expenses.

The challenges in the industry primarily stem from technological iteration and cross-industry competition. The decline in traditional business is evident, with global voice revenue decreasing by an average of 7% annually, and the ARPU value per capita has dropped by 40% over the past decade. The return on investment for 5G is lengthy, and there is also the need to contend with emerging competitors such as Starlink satellite broadband and cloud vendors' edge computing.

Operators are transforming by focusing on technological upgrades and ecological reconstruction. On the technical level, the emphasis is on developing network slicing, edge computing, and more. In terms of ecological construction, efforts are being made to shift from "traffic pipeline" to "digital service engine," such as developing metaverse platforms and integrating e-commerce payments. The ESG strategy has also become a differentiated lever.

2. Competition in the Stock Market and Challenges of Going Abroad

The telecommunications industry has entered a stage of competition in the existing market and deep cultivation of segmented markets. For operators, going abroad is not an easy task. The main obstacles include:

1. Market access restrictions: Many countries limit foreign investment shareholding ratios or require localized operations.

2. Differences in spectrum allocation rules: The 5G frequency bands vary by country, increasing the costs of cross-border deployment.

3. Data localization requirements: Regulations such as the EU GDPR restrict cross-border data flows.

4. Local monopoly pattern: Most countries are dominated by 2-3 local operators.

5. Price wars and subsidy culture: Emerging markets rely on low-cost packages and mobile subsidies, squeezing profits.

Operators are attempting to go overseas through equity investment, joint ventures, or virtual operations, but still find it difficult to escape the challenges of existing competition and high investment. In the future, there may be characteristics of "global capability, local delivery": building a global backbone network while complying with data regulations in various countries, choosing sides in the split of 6G standards, and providing highly localized operational services.

3. New Ideas for Reconstructing the Telecommunications Industry with Web3

Web3's reconstruction of the telecommunications industry is not merely a simple "Blockchain +", but rather an upgrade of the communication network to a fundamental value exchange layer through globalization, token economics, distributed governance, and open protocols.

At the infrastructure level, physical network resources are distributed and shared through tokenization. The DAO governance of spectrum resources can enhance utilization efficiency. The decentralized identity (DID) solution allows users to take control of their SIM card data. The Blockchain data market enables users to trade de-identified behavioral data and benefit from it.

Cross-border services and settlement achieve automation. Blockchain reconstructs international roaming clearing, significantly shortening settlement cycles and reducing costs. The DeFi model introduces a pricing system, allowing users to stake for discounts. The combination of IoT and edge computing gives rise to device autonomous networks.

In terms of the economic model, communication and finance achieve atomic-level integration. Users can earn profits by sharing bandwidth, data, etc., forming a "consumption-production" closed loop. The DeFi mechanism has given rise to innovative services such as communication insurance and cross-chain roaming.

Case: The Web3 decentralized telecom operator Roam is committed to building a global open wireless network. Through the OpenRoaming™ Wi-Fi framework and eSIM services, Roam has over 1.7 million nodes and 2.3 million users in 190 countries worldwide. Roam encourages users to participate in network co-construction and promotes the rapid development of decentralized networks through diversified incentive mechanisms.

4. Communication-based Value Exchange Network

The transformation of the Blockchain communication network upgrades the communication network to a "trinity network of transmitting information + value + trust", becoming the foundation of the next generation digital society. Historically, the evolution of communication technology has profoundly reconstructed the financial payment system:

1. Information transmission efficiency: Deconstructing the barriers of time and space. From telegraphs to Blockchain, payment cycles have been shortened from weeks to instant.

2. Connecting boundary expansion: building neural terminals for inclusive finance. Mobile payments have sparked an inclusive finance revolution in Africa, and the Internet of Things creates new payment scenarios.

3. Trust Mechanism Reconstruction: Trustless value transfer. Blockchain technology provides the foundation for "on-chain banking", giving rise to new forms such as global instant settlement networks.

Case study: Orange Money's mobile payment layout in Africa demonstrates the path for telecom operators to deepen their fintech initiatives. Leveraging its user base, Orange has launched mobile payment services in 17 countries, achieving success through scenario binding and localization strategies.

V. Conclusion

The telecommunications industry is undergoing a transformation. In the future, a "centralized facilities + decentralized services" hybrid model may emerge: basic communication operators control the physical layer resources, while service operators reconstruct based on the communication network to become the value routing hub. Users need to shift from passive consumers to ecological co-builders. Decentralized telecom operators like Roam may become the digital foundation of the Network State utopia.