Web3 Telecom: Redefining Communication Networks as Value Exchange Systems

In the global wave of digitalization, the traditional business model of the telecommunications industry faces unprecedented challenges. The promotion of 5G technology has brought enormous investment pressure to operators, but the revenue model has not improved, and value-added services have yet to break through, instead falling into competition in a saturated market. Data shows that while the revenue of leading telecommunications companies in the United States exceeds that of internet giants by 50%, their profitability is only 30% of the latter, with a profit margin of only 20% and a market value of only 30%. This reflects a lack of confidence among investors in the heavy asset model and low growth prospects of the telecommunications industry.

The telecommunications industry is seeking transformation. Early attempts by virtual operators failed to address substantive issues. The global roaming scenario envisioned at that time is actually well-suited for implementation in a Web3 manner, and can be enhanced through blockchain to promote value-added services, but the relevant technology had not yet emerged.

This article will discuss solutions based on the current state of the telecommunications industry, exploring blockchain and Web3 models, and using the decentralized operator Roam as an example to analyze the potential of blockchain and Web3 in reconstructing communication networks into value exchange networks.

The Traditional Telecom Operator Model Faces Challenges

Traditional telecom operators focus on communication infrastructure, profiting by providing connectivity services, value-added services, and industry digitalization solutions. The core logic is a three-layer architecture of "connectivity + ecosystem + services."

Basic communication services remain the main source of income, including mobile data, home broadband, etc. The 5G packages have driven the growth of data traffic revenue, but traditional voice and SMS revenues have significantly shrunk. Operators enhance user stickiness through bundled packages while developing value-added services such as cloud services and the Internet of Things as new growth points.

In terms of costs, operators face dual pressures from heavy asset investment and refined operations. The construction of 5G and spectrum auctions have raised capital expenditures, with global operators investing over $300 billion annually. To reduce costs, measures such as co-construction and sharing, as well as AI energy-saving solutions, are widely adopted. The competition in the existing market is fierce, with high terminal subsidies and channel costs driving the transition to digital direct sales.

The challenges in the industry mainly come from technological iterations and cross-border competition. The decline in traditional business is significant, with a 40% drop in ARPU per capita over the past decade. The return on investment for 5G is long-term, and it also needs to cope with emerging competitors such as satellite broadband and cloud vendors.

Operators are transforming by focusing on technological upgrades and ecological restructuring. Technologically, they are advancing network slicing, edge computing, etc., while ecologically shifting from "pipeline" to "digital service engine," such as launching metaverse platforms, super apps, etc. The ESG strategy has also become a differential lever.

Competition in the Stock Market and Exploration Abroad

In the past, relying on the model of the existing market and basic service fees has been difficult to support the investment and operating costs of 5G. The market has entered a stage of existing competition and segmented integration. The telecommunications industry faces many obstacles when going overseas: market access restrictions, differences in spectrum allocation, data localization requirements, local monopoly structures, price wars, etc.

Operators are attempting to go overseas through equity investment, joint ventures, virtual operations, and other models, but still find it difficult to break free from geographical constraints. In the future, it may present characteristics of "global capability, local delivery": building a global backbone network while adhering to the rules of each country, choosing sides in the fragmentation of technical standards, and highly localizing the service layer.

The Path of Web3 Reshaping the Telecommunications Industry

Web3 reconstruction is not merely "blockchain +", but rather an upgrade of the communication network to a foundational value exchange layer through globalization, token economics, distributed governance, and open protocols.

At the infrastructure level, physical network resources achieve tokenized sharing, spectrum resources are governed by DAO, and user identity management is innovated to decentralized identity. Cross-border services and settlements are automated, and a fee system is introduced in the DeFi model. In the Internet of Things field, the combination of blockchain and edge computing gives rise to autonomous networks for devices.

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

Case: Web3 Decentralized Telecom Operator Roam

Roam is committed to building a global open wireless network that ensures free, seamless, and secure connections between humans and smart devices. Based on the advantages of blockchain, Roam has established a decentralized communication network for the OpenRoaming™ Wi-Fi framework and integrated eSIM services.

Roam has over 1.7 million nodes in 190 countries worldwide, with 2.3 million users and 500,000 network verifications daily, making it the largest decentralized wireless network globally. Roam combines OpenRoaming™ technology and Web3's DID+VC technology to achieve seamless login and end-to-end encryption.

Roam encourages users to participate in network co-construction, sharing Wi-Fi nodes or upgrading to OpenRoaming™ Wi-Fi. Users can seamlessly connect between 4 million hotspots worldwide and earn data traffic or tokens through check-ins, invitations, and other methods. Roam's eSIM covers over 160 countries globally, providing users with flexible and cost-effective connectivity solutions.

Communication-Based Value Exchange Network

The essence of Web3 telecommunications reconstruction is to upgrade the communication network into a value exchange network, achieving the triad of "information + value + trust" transmission. Historically, the evolution of communication technology has profoundly restructured the financial payment system, promoting payment innovation by enhancing the efficiency of information transmission, expanding connection boundaries, and reconstructing trust mechanisms.

The Web3 communication network can significantly enhance the efficiency of value exchange, providing bank-level services on the blockchain for 1.4 billion people who cannot access traditional financial services. In the future, it may give rise to new forms such as a "global instant settlement network" and "AI autonomous financial entities."

Conclusion

The telecommunications industry is undergoing transformation. In the future, a hybrid model of "centralized infrastructure + decentralized services" may emerge: basic communication operators control physical layer resources and open network capabilities through APIs; service operators like Roam reconfigure as the global value routing hub based on communication networks and blockchain technology. Users need to transition from "passive consumers" to "ecosystem co-builders" to promote the development of the Web3 communication ecosystem.

Decentralized telecom operators like Roam in Web3 are expected to become the digital foundation of the ideal Network State.