Web3 Reshaping the Telecommunications Industry: From Communication Networks to Value Exchange Networks

Under the wave of digitalization, the traditional business model of the telecommunications industry is facing challenges. The promotion of 5G technology has brought enormous investment pressure, but the revenue model has not improved, and the breakthroughs in value-added services are limited, leading to competition in the existing market. Data shows that although leading telecommunications companies in the United States have higher revenues than internet giants, their profitability and market value lag significantly, reflecting investors' lack of confidence in the industry's prospects.

The telecommunications industry is seeking transformation. In the past, models such as virtual operators failed to address the fundamental issues. Today, Web3 technology provides new ideas for restructuring the industry and is expected to upgrade communication networks into value exchange networks. This article will explore how blockchain and Web3 models are reshaping the telecommunications industry, using Roam as an example to illustrate the potential impacts of this transformation.

1. Challenges Faced by Traditional Telecom Operators

Traditional operators focus on communication infrastructure for profit through connection services, value-added services, and industry solutions. Basic communication services remain the main source of income, but traditional voice and SMS businesses have significantly declined. Operators enhance user loyalty through bundled packages while developing value-added services such as cloud services and the Internet of Things.

In terms of costs, operators face dual pressures from heavy asset investment and refined operations. The construction of 5G base stations and spectrum auctions have driven up capital expenditures, with global operators investing over $300 billion annually. To reduce costs, common measures such as co-construction and sharing, as well as AI energy-saving solutions, are widely adopted.

The main challenges in the industry come from technological iterations and cross-industry competition. Traditional business revenues continue to decline, the return on investment for 5G is long, and there is also the need to cope with the impact of new competitors such as satellite broadband and cloud service providers. Operators are transforming from "traffic pipelines" to "digital service engines," building content ecosystems and developing new businesses such as the metaverse.

II. The Dilemmas of Going Global

In the context of intensified competition in the existing market, going overseas has become one of the choices for operators. However, the telecommunications industry, being a sensitive sector, faces numerous obstacles in multinational expansion.

1. Market access restrictions: Many countries limit foreign ownership ratios or require localized operations.

2. Differences in Spectrum Allocation Rules: The 5G frequency bands vary by country, increasing the costs of cross-border deployment.

3. Data localization requirements: Strict data storage regulations restrict cross-border data flow.

4. Local monopoly market structure: Most countries are dominated by 2-3 local operators.

5. Price wars and subsidy culture: Emerging markets rely on low-priced packages, putting cost pressure on multinational operators.

Operators are attempting to go overseas through equity investment, joint ventures, and virtual operations, but still find it difficult to break free from regional limitations. The overseas strategy presents characteristics of "global capabilities, local delivery": building a backbone network globally while complying with the rules of each country; choosing camps in terms of technical standards; and achieving a high level of localization in service.

3. The Path of Web3 Reconstructing the Telecommunications Industry

Web3 reconstruction is not just a simple "blockchain +", but rather upgrading the communication network to a foundational value exchange layer through globalization, token economies, distributed governance, and open protocols. The main reconstruction paths include:

1. Infrastructure Layer:

• Tokenization of physical network resources for sharing
• Spectrum resource DAO governance enhances utilization rate
• Decentralized Identity ( DID ) solution protects user privacy
• The blockchain data market allows users to gain data revenue.

2. Cross-border services and settlement:

• Blockchain reconstructs roaming settlement, achieving real-time revenue sharing
• The DeFi model introduces a fee system
• Blockchain + Edge Computing Gives Rise to Device Autonomous Networks

3. Economic Model:

• Atomic-level integration of communication and finance
• Users can earn profits by sharing resources.
• Derivative innovative services of DeFi mechanisms

Example: Web3 Decentralized Telecom Operator Roam

Roam has built a global open wireless network, combining OpenRoaming™ Wi-Fi and eSIM services, with over 1.7 million nodes and 2.3 million users in 190 countries. Its innovations include:

• Combine OpenRoaming™ and Web3 technology to achieve seamless login and end-to-end encryption
• Encourage users to co-build the network and earn rewards by sharing Wi-Fi nodes.
• eSIM covers over 160 countries worldwide, simplifying the usage process.
• Diversified incentive mechanisms promote the development of decentralized networks

IV. Communication-Based Value Exchange Network

The essence of Web3 reconstruction is to upgrade the communication network into a value exchange network, achieving the triadic transmission of "information + value + trust". Historically, the evolution of communication technology has profoundly restructured the payment system:

1. Improve the efficiency of information transmission: from telegraphs to blockchain, continuously compressing the time of value transfer.

2. Expanding connection boundaries: Mobile communication extends payment nodes to every corner, and the Internet of Things creates new payment scenarios.

3. Reconstructing the Trust Mechanism: Building a new type of trust mechanism on the blockchain network to achieve value transfer without intermediaries.

The "on-chain bank" based on blockchain has already been able to realize various financial service functions, which may in the future give rise to new forms such as global instant settlement networks and AI autonomous financial entities.

Case Study: Orange Money's Mobile Payment Strategy in Africa

Orange Money relies on the telecom user base and has launched mobile payment services in 17 African countries, adopting a differentiated competition strategy:

• Compete for market share in East Africa with low fees, dominating in French-speaking West Africa with language advantages.
• Vertical scene binding: Linking with agricultural cooperatives, accessing government services
• Innovative microcredit and low-cost cross-border remittance services
• Enhance ARPU through payments, optimize risk control using transaction data.
• Facing challenges such as profit pressure, security investment, and political risk

V. Conclusion

The telecommunications industry is undergoing transformation, and a hybrid model of "centralized facilities + decentralized services" may emerge in the future:

• Basic communication operators: control physical layer resources and open network capabilities through APIs.
• Service operators: Build a global ecological business based on communication networks and blockchain technology.
• User role: from passive consumer to ecological co-builder

Decentralized telecom operators like Roam are expected to become the digital foundation of the Network State, driving the upgrade of communication networks to value exchange networks.