The Web3 Transformation of the Telecommunications Industry: Exploring How Blockchain Restructures Communication Networks through the Example of Roam

In the global wave of digitalization, traditional telecom operators are facing unprecedented challenges. The promotion of 5G technology brings immense investment pressure, but revenue models have not improved, and value-added services have yet to break through, instead falling into a battle for the existing market. Data shows that while the revenue of leading telecom 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 their market value is only 30% of that of internet companies. This reflects a severe lack of confidence among investors in the telecom industry's heavy asset, low growth model.

The telecommunications industry is undergoing constant transformation. Previous attempts to engage in virtual operator business did not solve the fundamental issues. Whether it was fighting for existing users or deepening the industry, there has not been any essential transformation. The global roaming scenarios explored at that time were actually very suitable for implementation in a Web3 manner and could promote value-added services through Blockchain, but the technologies were not yet prevalent at that time.

This article will explore the solutions of blockchain and Web3 models based on the current situation of the telecommunications industry, and analyze the impact of upgrading communication networks to value exchange networks through the case of Roam.

Challenges Faced by Traditional Telecom Operators

Traditional operators focus on communication infrastructure, profiting through connection services, value-added services, and industry solutions. Their model can be summarized as a three-layer architecture of "Connection + Ecology + Service."

Basic communication services remain the main source of revenue, including mobile data, home broadband, etc. 5G packages drive the growth of data traffic revenue, but traditional voice and SMS revenues have sharply declined. Operators enhance user stickiness through bundled sales, with China Mobile's integrated package penetration rate exceeding 60%. At the same time, value-added services such as cloud services and the Internet of Things have become new growth points.

In terms of costs, operators face dual pressures of heavy asset investment and refined operations. The construction of 5G, spectrum auctions, and other factors have driven up capital expenditures, with global operators investing over $300 billion annually. To reduce costs, measures such as co-construction and sharing, and AI energy saving are commonly adopted. However, competition in the existing market keeps costs high, with terminal subsidies and channel commissions accounting for more than half of marketing expenses.

The main challenges come from technological iteration and cross-industry competition. The decline of traditional businesses is evident, with global voice revenue decreasing by 7% annually and SMS revenue shrinking by 90%. Although 5G users are growing rapidly, the return cycle is long, and there is pressure from new competitors such as satellite broadband and cloud vendors.

Operators are transforming by focusing on technological upgrades and ecological restructuring. Technologically, network slicing and edge computing have become key. Ecologically, there is a shift from "traffic pipeline" to "digital service engine," such as South Korea's SKT launching a metaverse platform and China Mobile entering the content ecosystem. The ESG strategy has also become a differentiated approach.

The Dilemma of Telecom Operators Going Abroad

Traditional business models find it difficult to support the investment and operational costs of 5G; the market has entered a stage of competition for existing shares and deep cultivation of niche markets. Going overseas has become a choice for many industries, but telecom operators face numerous obstacles:

1. Market access restrictions: Many countries restrict foreign ownership ratios or require localized operations.
2. Different spectrum allocation rules: The 5G frequency bands vary by country, increasing the cost of cross-border deployment.
3. Data localization requirements: such as the EU GDPR restrictions on cross-border data flows.
4. Local monopoly market structure: In most countries, 2-3 local operators dominate.
5. Price wars and subsidy culture: Emerging markets rely on low-priced packages, squeezing profit margins.

Despite operators attempting to go overseas through equity investment, joint ventures, or virtual operator models, they still struggle to escape the dilemma of competing for existing market share and high investment. Therefore, the telecom industry's "going overseas" presents the characteristics of "global capability, local delivery:"

• Core Network Layer: Build a global backbone network, but must comply with the data sovereignty rules of each country.
• Technical Standard Layer: In fields such as 6G research and development, it is necessary to choose among different technology camps.
• Service application layer: Highly localized, relying on joint venture partners or local teams for operation.

The Possibility of Web3 Restructuring the Telecommunications Industry

Web3 reconstructing the telecommunications industry is not just a simple "Blockchain +", but rather upgrading the communication network to a fundamental value exchange layer through globalization, token economy, distributed governance, and open protocols.

At the infrastructure level:

• Physical network resources are shared in a distributed manner through tokenization, such as the feasibility of users verified by Roam earning token incentives for contributing Wi-Fi hotspots.
• The DAO governance of spectrum resources can improve utilization and create shared benefits.
• The decentralized identity ( DID ) solution allows users to have autonomous control over SIM card data.
• The Blockchain data market allows users to trade de-identified behavioral data and earn profits.

Cross-border services and settlement automation:

• Blockchain reconstructs international roaming settlement, compressing the settlement period from 30 days to real-time.
• The DeFi model introduces a fee system, allowing users to obtain discounts through staking.
• In the field of the Internet of Things, the combination of Blockchain and edge computing has given rise to autonomous device networks.

In terms of economic models, communication and finance achieve atomic-level integration:

• Users can earn income by sharing bandwidth and data, forming a "consumption-production" closed loop.
• The DeFi mechanism has spawned innovative services such as communication insurance and cross-chain roaming.

Roam: A Case Study of a Decentralized Telecommunications Operator in Web3

Roam is committed to building a global open wireless network, ensuring that humans and smart devices can achieve free, seamless, and secure connections. Leveraging the advantages of Blockchain, Roam constructs a decentralized communication network based on the OpenRoaming™ Wi-Fi framework and integrates eSIM services to build a globally open and free wireless network.

After more than two years of development, Roam has over 1.7 million nodes in 190 countries worldwide, more than 2.3 million users, and an average of 500,000 network validation activities per day, making it the largest decentralized wireless network in the world. Users can also obtain free eSIM data, making Roam a telecom service provider operating on an internet model.

Roam combines OpenRoaming™ technology and Web3's DID+VC technology to build a decentralized communication network. This not only reduces the cost of global network construction but also achieves seamless login and end-to-end encryption similar to cellular networks. Users do not need to log in repeatedly and can connect to Wi-Fi with the same ease as using cellular data, significantly enhancing the user experience.

Roam encourages users to participate in network co-construction through the App, sharing Wi-Fi nodes or upgrading to OpenRoaming™ Wi-Fi. Users can seamlessly connect between four million OpenRoaming™ hotspots worldwide and find Roam self-built nodes in remote areas. At the same time, Roam eSIM covers over 160 countries globally, providing users with flexible and cost-effective network connection solutions.

Through Wi-Fi + eSIM global free access and a diversified incentive mechanism, Roam promotes the rapid development of decentralized networks. Users can earn traffic or tokens by checking in, inviting friends, or interacting with Roam's social media, creating stable income channels.

Communication-based Value Exchange Network

The essence of how Blockchain and Web3 reconstruct the telecommunications industry is to upgrade the communication network into a value exchange network, achieving the trinity of "information + value + trust," becoming the digital social foundation that integrates value transmission, data verification, and trust collaboration.

From a historical perspective, the evolution of communication technology has restructured the financial payment system, with each technological breakthrough bringing about a qualitative change in payment forms. Communication technology continues to drive financial payment innovation by improving information transmission efficiency, expanding connection boundaries, and reconstructing trust mechanisms.

1. Information transmission efficiency: Deconstructing the barriers to the transmission of space-time value. From telegram to Blockchain, communication technology continuously compresses cross-border payment time and enhances efficiency. Web3-based communication networks can also significantly improve the efficiency of value exchange.

2. Connecting Boundary Expansion: Building the Neural End of Inclusive Finance Cellular mobile communication extends payment nodes to every corner of the physical world. Projects like Roam can provide bank-level financial services on the Blockchain for the global population, including 1.4 billion unbanked individuals, achieving financial inclusion.

3. Trust Mechanism Reconstruction: InTrustlessWeTrust Blockchain technology provides the foundation for a world without trusted intermediaries. "On-chain banking" can now achieve various traditional banking functions, such as savings, investment management, transfers, payments, and more. The future may give rise to new forms such as the "global instant settlement network" and "AI autonomous financial entities."

Future Outlook

The telecommunications operator industry is undergoing transformation. In the future, a "centralized infrastructure + decentralized services" hybrid model may be formed:

• Basic communication operators: continue to act as "pipeline workers", controlling physical layer resources, but open network capabilities through APIs for DePIN projects to call.
• Service operators: Such as Roam, based on communication networks and Blockchain technology, reconstructing as the central hub for global value routing with open protocols.
• User Layer: Transitioning from "passive consumers" to "ecosystem builders", promoting the development of the Web3 communication ecosystem.

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