The Digital Revolution of Communication Networks: Web3 Reshaping the Telecom Industry

Under the global wave of digitalization, the traditional business models of the telecommunications industry are facing enormous challenges. The promotion of 5G technology has put significant investment pressure on operators, but the revenue model has not improved, and the breakthroughs in value-added services are limited, leading to fierce competition in the existing market. Data shows that although the top telecommunications companies in the United States have revenues that exceed those of internet giants by 50%, their profitability is only 30% of the latter, with profit margins at only 20% of internet companies, and market value at only 30% of theirs. This reflects investors' lack of confidence in the heavy asset model and low growth prospects of the telecommunications industry.

The telecommunications industry is undergoing transformation. Experience from 2015/2016 in the virtual operator business indicates that merely opening up to private enterprises has not solved the fundamental issues. The eSIM global roaming scenarios explored at that time now seem very suitable for implementation through Web3, and can leverage blockchain to promote value-added services. This article will discuss solutions for the reconstruction of the industry based on the current state of the telecommunications industry, exploring the impact of blockchain technology and the Web3 model, and analyze the influence of the case of decentralized telecom operator Roam on the upgrade of communication networks to value exchange networks.

Traditional Telecom Operator Model Faces Challenges

Traditional telecommunications operators focus on communication infrastructure and profit by providing connectivity services, value-added services, and industry digital solutions. Basic communication services remain the main source of revenue, but traditional voice and SMS revenues have significantly shrunk. Value-added services such as cloud computing and the Internet of Things have become new growth points. On the cost side, operators face dual pressures of heavy asset investment and refined operations. The construction of 5G base stations, spectrum auctions, and other factors have driven up capital expenditures, with global operators investing over $300 billion annually.

The main challenges in the industry come from technological iterations and cross-border competition. The decline of traditional businesses is evident, with global voice revenue decreasing by an average of 7% annually and SMS revenue shrinking by 90%. The return on investment for 5G is long-term, and it also needs to address emerging competitors like Starlink and cloud providers. Operators are transforming from "traffic pipelines" to "digital service engines," such as South Korea's SKT launching a metaverse platform and China Mobile developing a video content ecosystem. ESG strategies have also become a means of differentiation, with Vodafone planning to achieve 100% renewable energy supply by 2030.

Competition in the Stock Market and Exploration Overseas

The telecommunications industry has now entered a stage of competition in the existing market, with various operators delving into niche markets. For telecom operators, going abroad faces numerous challenges: market access restrictions, differences in spectrum allocation rules, data localization requirements, local monopoly patterns, and price wars. Operators are trying to expand overseas through equity investments, joint ventures, and virtual operations, but still find it difficult to break free from regional limitations.

Future telecommunications operators going overseas may exhibit the characteristics of "global capability, local delivery": constructing a global backbone network at the core network layer; choosing sides in technical standards during 6G R&D; and highly localized operations at the service application layer. However, this limited globalization model still struggles to fundamentally resolve the industry's dilemmas.

Web3 Reshaping the Telecommunications Industry Solutions

Web3 technology provides new ideas for restructuring the telecommunications industry. At the infrastructure layer, physical network resources can be distributed and shared through tokenization. The Roam project has verified the feasibility of incentivizing users with tokens for contributing Wi-Fi hotspots, and a decentralized network covering millions of nodes has been established. Spectrum resources can be governed by DAOs to improve utilization. User identity management is also being revolutionized, with decentralized identity solutions allowing users to have autonomous control over their data.

Cross-border services and settlement automation have become breakthroughs. Blockchain technology can shorten the international roaming settlement period from 30 days to real-time, reducing costs by 40%. The DeFi model introduces a fee system, allowing users to receive discounts through staking. In the Internet of Things field, the combination of blockchain and edge computing has given rise to autonomous device networks. In terms of economic models, communication and finance achieve deep integration, allowing users to earn profits through resource sharing, forming a "consumption-production" closed loop.

Roam: A Case Study of a Web3 Decentralized Telecom Operator

Roam is committed to building a global open wireless network, ensuring that humans and smart devices can achieve free, seamless, and secure network connections. Leveraging the advantages of blockchain, Roam has built a decentralized communication network covering 190 countries through the OpenRoaming™ Wi-Fi framework and eSIM services.

Roam encourages users to participate in network co-construction, share Wi-Fi nodes or upgrade to OpenRoaming™ Wi-Fi. Users can seamlessly connect between four million hotspots worldwide and find Roam nodes in remote areas. At the same time, Roam eSIM provides users with flexible connectivity solutions in over 160 countries globally.

Through global free access via Wi-Fi + eSIM and a diversified incentive mechanism, Roam promotes the rapid development of decentralized networks. Users can earn global data traffic or Roam points in various ways, creating stable income channels.

Communication-Based Value Exchange Network

Blockchain and Web3 are reconstructing the telecommunications industry, essentially upgrading communication networks into value exchange networks, achieving a triad of "information + value + trust" transmission. From a historical perspective, the evolution of communication technology has profoundly restructured the financial payment system. The Web3 communication network is expected to drive transformations in the following areas:

1. Improve information transmission efficiency and deconstruct spatial and temporal barriers.
2. Expand connection boundaries and build inclusive finance at the grassroots level.
3. Reconstruct the trust mechanism to achieve "trust without trust"

In the future, a hybrid model of "centralized facilities + decentralized services" may form: basic communication operators are responsible for the physical layer and provide open APIs for DePIN projects to call; service operators like Roam will reconstruct themselves as the central hub of global value routing based on communication networks and blockchain technology. Users need to shift from "passive consumers" to "ecological co-builders" to promote the development of the Web3 communication ecosystem.

Web3 decentralized telecom operators like Roam are expected to become the digital foundation of the Network State ideal, building a new communication and value exchange network for future society.