The Web3 Transformation Journey of Telecom Operators

In the wave of global informationization, the traditional telecommunications industry is facing unprecedented challenges. The pressure of huge investments brought by 5G technology has not been matched by improvements in revenue models, and value-added services have yet to break through, leading to competition in a stagnant market. Data shows that although the revenue of leading telecommunications companies in the United States is higher than that of internet giants, their profitability and market value are both far lower than the latter, reflecting investors' lack of confidence in the industry's prospects.

The telecommunications industry has been exploring transformation. Previous attempts by virtual operators and overseas expansion failed to address fundamental issues. It now seems that the originally envisioned global roaming scenario is better suited to be realized through Web3 methods, and enhanced value-added services facilitated by blockchain. This article will explore how blockchain and the Web3 model can reconstruct the telecommunications industry and what this reconstruction means for us.

1. The Traditional Telecom Operator Model Faces Challenges

Traditional telecom operators focus on communication networks, achieving profitability through connectivity services, value-added services, and industry solutions. Basic communication services remain the main source of revenue, but traditional voice and SMS services are being replaced by OTT applications. Operators enhance user stickiness through bundled packages while developing cloud services, IoT, and other value-added services as 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 increased capital expenditure, and the industry is reducing costs and increasing efficiency through methods such as base station sharing and AI energy saving. Competition in the existing market is fierce, with terminal subsidies and channel costs remaining high, prompting a shift towards digital direct sales.

Technological iteration and cross-industry competition are the main challenges in the industry. Traditional business revenues continue to decline, the return on investment for 5G is lengthy, and there are new competitors such as satellite broadband and cloud services to contend with. Operators are accelerating their transformation towards digital services, building ecosystems around content, payments, and seeking differentiation through ESG strategies.

2. Exploration and Limitations in Going Abroad

Against the backdrop of intensified competition in the stock market, going overseas has become a choice for many enterprises. However, for telecommunications operators, internationalization faces numerous obstacles:

1. Market access restrictions: Many countries set limits on foreign investment in telecommunications companies by imposing shareholding ratio caps or requiring localized operations.
2. Spectrum allocation differences: The 5G frequency bands are not uniform across countries, increasing the cost of cross-border deployment.
3. Data localization requirements: Strict data storage regulations restrict cross-border data flow.
4. Local monopoly pattern: Most markets are dominated by 2-3 local operators, making it difficult to shake up.
5. Price wars and subsidy pressures: Emerging markets rely on low-priced packages, squeezing profit margins.

In the face of these difficulties, operators attempt to enter overseas markets through equity investment, joint ventures, and virtual operations, but still find it difficult to escape regional restrictions and existing competition. In the future, it may present characteristics of "global capability, local delivery," seeking breakthroughs at three levels: core networks, technical standards, and service applications.

3. The Possibility of Web3 Restructuring the Telecommunications Industry

Web3 provides new ideas for restructuring the telecommunications industry, not just a simple "blockchain +", but by upgrading the communication network to a basic value exchange layer through concepts like globalization, token economy, and distributed governance.

At the infrastructure level, physical network resources achieve tokenized sharing. The Web3 telecom operator Roam has validated a model where users contribute Wi-Fi hotspots in exchange for token incentives, building a decentralized network that covers millions of nodes. The DAO governance of spectrum resources can enhance utilization, user identity management is evolving towards decentralization, and data sovereignty is further returning to users.

Cross-border services and settlement automation have become breakthroughs. Blockchain technology reconstructs international roaming clearing, significantly shortening settlement cycles and reducing costs. The DeFi model introduces a charging system, allowing users to obtain communication discounts through staking. In the field of the Internet of Things, the combination of blockchain and edge computing gives rise to autonomous networks for devices.

In terms of the economic model, communication and finance achieve deep integration. Users can earn income by sharing resources, forming a "consumption-production" closed loop. The DeFi mechanism has given rise to innovative services such as communication insurance and cross-chain roaming, while on-chain smart contracts automatically execute cross-border settlements.

Case: Web3 Decentralized Telecom Operator Roam

Roam is dedicated to building a global open wireless network, ensuring that humans and smart devices can connect freely, seamlessly, and securely. Leveraging the globalization advantages of blockchain, Roam has built a decentralized communication network covering 190 countries through the OpenRoaming™ Wi-Fi framework and eSIM services.

In just over two years, Roam has amassed nearly 1.73 million nodes and 2.35 million users, conducting 500,000 network verifications daily, making it the largest decentralized wireless network in the world. Roam combines traditional OpenRoaming™ technology with Web3's DID+VC technology to achieve seamless login and end-to-end encryption similar to cellular networks, greatly enhancing user experience.

Roam encourages users to participate in network co-construction, sharing Wi-Fi nodes or upgrading to OpenRoaming™ Wi-Fi. Users can not only connect seamlessly across 4 million hotspots worldwide but also find Roam nodes in remote areas. At the same time, Roam eSIM offers flexible network connection solutions for over 160 countries globally.

Through global free access via Wi-Fi + eSIM and a diverse incentive mechanism, Roam has accelerated the rapid development of decentralized networks. Users can earn global data traffic or Roam Points tokens by checking in, inviting friends, and other methods, creating stable revenue streams.

4. Communication-based Value Exchange Network

The reconstruction of the telecommunications industry through blockchain and Web3 essentially upgrades the communication network into a value exchange network, transitioning from "transmitting information" to a trinity network of "transmitting information + value + trust." This transformation will profoundly impact three dimensions: the efficiency of information transmission, the expansion of connection boundaries, and the reconstruction of trust mechanisms.

4.1 Information Transmission Efficiency: Deconstructing Space-Time Barriers

From telegrams to blockchain, communication technology continuously improves the efficiency of value transmission. Blockchain replaces centralized architecture with a P2P network, creating a value transmission channel without intermediaries, increasing efficiency by hundreds of times. The Web3 communication network based on blockchain will further enhance the efficiency of value exchange.

4.2 Connecting Boundary Expansion: Inclusive Finance Neural End

Mobile communication technology extends payment nodes to every corner of the physical world. Global networks built by projects like Roam can provide blockchain-based financial services to 1.4 billion people without access to traditional banking, achieving true inclusive finance. Internet of Things communication technology is creating new payment scenarios, with 5G networks supporting innovative applications such as connected vehicles.

4.3 Trust Mechanism Reconstruction: InTrustlessWeTrust

Bitcoin depicts a world without the need for trusted intermediaries, but when reality intertwines with ideals, how to build a trust mechanism on the blockchain network becomes key. The "on-chain bank" based on blockchain and Web3 has already enabled functions such as savings, investment, transfer, and payment, providing users with convenient financial services. With the restructuring of mechanisms, more innovative financial services will emerge.

V. Conclusion

The telecommunications industry is undergoing transformation. A hybrid model of "centralized facilities + decentralized services" may emerge in the future: basic communication operators will control the physical layer and open network capabilities; service operators like Roam will reconstruct into the global value routing hub based on communication networks and blockchain technology. Users will shift from passive consumers to ecological co-builders, promoting the development of the Web3 communication ecosystem.

Decentralized telecommunications operators like Roam are expected to become the digital foundation of the Network State ideal, providing a solid basis for future digital civilization.