Web3 Restructuring the Telecommunications Industry: Upgrading Communication Networks to Value Exchange Networks

Under the global wave of digitalization, the traditional business model of the telecommunications industry faces significant challenges. The promotion of 5G technology requires huge investments, but the revenue model has not improved, and value-added services have yet to break through, resulting in competition within a stagnant market. Data shows that while leading telecommunications companies in the United States have revenues exceeding those of internet giants by 50%, their profitability is only 30% of the latter, with profit margins at only 20%, net income around 5%, and market value only 30% of that of internet companies. This reflects investors' lack of confidence in the heavy asset model and growth potential of the telecommunications industry.

The telecommunications industry is seeking transformation. Previous attempts such as virtual operators have failed to address fundamental issues. Currently, globalization and the integration of niche markets have become trends, but many obstacles remain. This article will explore how blockchain and the Web3 model can reconstruct the telecommunications industry, using the Web3 operator Roam as an example to analyze the impact of upgrading communication networks to value exchange networks.

Challenges Faced by Traditional Telecom Operators

The traditional telecom business model is centered around communication infrastructure, profiting through connection services, value-added services, and industry digital solutions. Basic communication services remain the main source of revenue, but traditional voice and SMS revenue have significantly declined. Operators enhance user stickiness through package bundling while also developing value-added services such as cloud services.

In terms of costs, operators are facing dual pressures of heavy asset investment and refined operations. The construction of 5G and other factors are driving up capital expenditures, while the industry is adopting shared construction and AI energy-saving measures to reduce costs. Competition in the existing market keeps costs high, with terminal subsidies and channel commissions taking up too high a proportion.

The main challenges come from technological iterations and cross-industry competition. Traditional businesses are clearly shrinking, the return cycle for 5G is long, and there is competition from new rivals such as satellite broadband and cloud vendors. Operators are transforming from "traffic pipelines" to "digital service engines," building content ecosystems, and promoting ESG strategies.

Competition in the Stock Market and Challenges of Overseas Expansion

The telecommunications industry has entered the stage of competition in the existing market, making it difficult to support investments in 5G. Overseas expansion also faces numerous obstacles:

1. Market access is restricted, with many countries limiting foreign ownership ratios or requiring localized operations.
2. The spectrum allocation rules vary by country, increasing the cost of cross-border deployment.
3. Data localization requirements are strict, restricting cross-border data flow.
4. The local oligopoly market structure makes it difficult to break user inertia.
5. The price war in emerging markets is fierce, and the cost of subsidies is high.

To address these difficulties, operators have adopted methods such as equity investment, joint ventures, and virtual operations, but still find it hard to break free from regional constraints. In the future, there may be characteristics of "global capability, local delivery."

• Core Network Layer: Build a global backbone network, comply with the data sovereignty rules of various countries.
• Technical Standards Layer: Selecting technological camps in fields such as 6G research and development
• Service application layer: Highly localized, relying on local team operations

The Direction of Web3 Restructuring the Telecommunications Industry

Web3's reconstruction of 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:

• Tokenization of physical network resources enables distributed sharing, such as Roam users contributing Wi-Fi hotspots to earn token rewards.
• Spectrum resource DAO governance, such as "5G spectrum NFT" auctioned on demand to improve utilization rate
• The decentralized identity (DID) solution allows users to have control over their SIM card data.
• The blockchain data marketplace allows users to trade anonymized data and earn profits.

Cross-Border Services and Settlement Automation:

• Blockchain reconstructs international roaming settlement, shortening the settlement cycle to real-time.
• The DeFi model introduces a fee system, where users stake stablecoins to receive communication discounts.
• Carrier-specific tokens reshape the payment ecosystem
• The combination of blockchain and edge computing gives rise to autonomous device networks

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

• Users pay for services with cryptocurrency and earn returns by sharing resources.
• DeFi mechanism derivatives communication insurance, cross-chain roaming and other innovative services
• On-chain smart contracts automatically execute cross-border settlements, significantly reducing costs.

Web3 Decentralized Telecom Operator Roam Case Study

Roam is committed to building a global open wireless network that ensures free, seamless, and secure network connections for humans and smart devices. Leveraging the advantages of blockchain, Roam has constructed a global open and free wireless network through the OpenRoaming™ Wi-Fi framework and eSIM services.

Currently, Roam has 1.72 million nodes and 2.34 million users in 190 countries around the world, with an average of 500,000 network verifications per day. Roam collaborates with the Wi-Fi Alliance to build a decentralized communication network using OpenRoaming™ technology and Web3's DID+VC technology, reducing construction costs and achieving seamless login and end-to-end encryption.

Roam encourages users to participate in the network co-construction, sharing Wi-Fi nodes or upgrading to OpenRoaming™ Wi-Fi. Users can seamlessly connect among 4 million hotspots worldwide and find Roam nodes in remote areas. At the same time, Roam eSIM covers over 160 countries, providing users with flexible and efficient network connection solutions.

Roam promotes the development of decentralized networks through global free access via Wi-Fi + eSIM and a diversified incentive mechanism. Users can earn global data traffic or Roam points tokens through various means, creating a continuous and stable revenue stream.

Communication-based Value Exchange Network

The transformation of the blockchain communication network upgrades the communication network into a value exchange network, achieving a triad of "information + value + trust," and becoming the foundation of a digital society that integrates value transmission, data rights confirmation, and trust collaboration.

Historically, the evolution of communication technology has profoundly restructured the financial payment system, with each technological breakthrough bringing a qualitative leap in payment forms:

1. Information transmission efficiency: Deconstructing the barriers of value transmission across time and space

   • Telegram technology has achieved cross-time and space value transmission for the first time.
   • The SWIFT system shortens the cross-border payment cycle
   • Internet achieves millisecond-level electronic payments
   • Blockchain builds a value transfer channel without intermediaries

2. Connecting Boundary Extension: Building Inclusive Financial Neural Endings

   • Mobile communication technology extends payment nodes to every corner.
   • Roam Network provides blockchain financial services for 1.4 billion people.
   • IoT communication creates new payment scenarios
   • 5G supports applications such as automatic charging and billing for cars.

3. Trust Mechanism Reconstruction: InTrustlessWeTrust

   • Building new trust mechanisms on the blockchain
   • "On-chain banks" realize various traditional banking functions
   • Build innovative financial services based on blockchain communication networks

Future Transformation of the Telecommunications Industry

In the future, a mixed model of "centralized facilities + decentralized services" may emerge:

1. Basic Communication Operators:

   • Control physical layer infrastructure
   • Open network capabilities through API
   • Tokenizing network slicing as Vodafone

2. Service Operator:

   • For example, Roam is based on communication networks and blockchain technology
   • Reconstruct as the global value routing hub
   • Develop communication-based ecological business

3. User Layer:

   • From "passive consumers" to "ecological co-builders"
   • Promote the development of the Web3 communication ecosystem

Web3 decentralized telecom operators like Roam are expected to become the underlying infrastructure for new digital societies such as Network State.