How does Blockchain Restructure the Traditional Telecom Industry?

Under the global digitalization wave, traditional telecom operators are facing unprecedented challenges. Although the promotion of 5G technology has brought huge investments to operators, the revenue model has not improved, and value-added services have yet to achieve breakthroughs. Data shows that while leading telecom companies in the United States have higher revenues than internet giants, their profitability and market value are far lower than the latter, reflecting investors' lack of confidence in the telecom industry's heavy asset model and growth potential.

The telecommunications industry is undergoing constant transformation. The earlier openness of virtual operator services did not resolve the fundamental issues. In retrospect, the originally envisioned global roaming scenario is actually very suitable for implementation through Web3 methods, and can promote the development of value-added services with the help of Blockchain. This article will explore the solutions of Blockchain and Web3 operating models based on the current state of the traditional telecommunications industry, and take the Web3 decentralized telecom operator Roam as an example to analyze in depth the impact of Blockchain and Web3 on the reconstruction of the telecommunications industry.

Traditional Telecommunications Operators' Business Model Faces Challenges

Traditional telecom operators focus on communication network infrastructure, achieving profitability by providing basic connectivity services, value-added services, and industry digital solutions. Basic communication services remain the primary source of revenue, but traditional voice and SMS services have significantly shrunk due to the substitution by OTT applications. Operators enhance user stickiness through bundling sales, while also developing cloud services, Internet of Things, and other value-added services as growth engines.

However, operators face the dual pressure of heavy asset investment and refined operations. The construction of 5G base stations and spectrum auctions have increased capital expenditures, with global operators investing over $300 billion annually. To reduce costs, the industry widely adopts measures such as co-construction and sharing, as well as AI energy-saving. Competition in the existing market is intense, with terminal subsidies and channel commissions accounting for more than half of marketing expenses, prompting operators to shift towards digital direct sales.

The main challenges in the industry come from technological iteration and cross-industry competition. Traditional business is clearly declining, with global voice revenue decreasing by an average of 7% per year and the per capita ARPU value dropping by 40% over the past decade. Although 5G users are growing rapidly, the return cycle is long, and it also needs to cope with the impact of emerging competitors such as Starlink and cloud vendors.

Competition in the Stock Market and Exploration Abroad

The telecommunications industry has entered the stage of competition in the existing market, with each operator deeply cultivating niche markets. However, going overseas is not an easy task. Telecommunications is a sensitive industry in various countries, facing numerous obstacles:

1. Market access restrictions: Many countries restrict foreign ownership ratios or require localized operations.
2. Spectrum allocation rules vary: the 5G frequency bands are not unified across countries, increasing the cost of cross-border deployment.
3. Data localization requirements: Many countries mandate that data be stored domestically, restricting cross-border data flow.
4. Local monopoly market structure: In most countries, 2-3 local operators dominate.
5. Price Wars and Subsidy Culture: Emerging Markets Rely on Low-Cost Packages and Mobile Subsidies

In response to these difficulties, operators are attempting to go overseas through equity investment, joint ventures, or virtual operator models, but they still find it hard to break free from regional limitations. In the future, telecom operators may exhibit characteristics of "global capabilities, local delivery," seeking breakthroughs in core networks, technical standards, and service application layers.

Web3 Restructuring Solutions for the Telecommunications Industry

Blockchain and Web3 operating models provide new ideas for restructuring the telecommunications industry. This 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 can be distributed and shared through tokenization. The DAO governance of spectrum resources can improve utilization and create shared profits. Innovations in user identity management, with decentralized identity (DID) solutions, allow users to have autonomous control over SIM card data. Data sovereignty further returns to users, while operators transform into transaction matching parties.

Cross-border services and settlements are automated. Blockchain reconstructs international roaming clearing, significantly shortening the settlement cycle and reducing costs. The DeFi model introduces a pricing system, allowing users to obtain communication discounts through staking. In the Internet of Things field, the combination of blockchain and edge computing gives rise to device autonomous networks.

In terms of the economic model, communication and finance achieve atomic-level integration. Users can earn profits by sharing bandwidth, data, etc., forming a "consumption-production" closed loop. The DeFi mechanism gives rise to innovative services such as communication insurance and cross-chain roaming.

Case Study of Web3 Decentralized Telecom Operator Roam

Roam is dedicated to building a global open wireless network that ensures free, seamless, and secure network connections for humans and smart devices. By establishing a decentralized communication network based on the OpenRoaming™ Wi-Fi framework and integrating eSIM services, Roam has created a globally open and free wireless network.

Currently, Roam has over 1.7 million nodes and more than 2.3 million users in 190 countries around the world, conducting 500,000 network verification activities daily, making it the largest decentralized wireless network globally. Roam combines traditional OpenRoaming™ technology with Web3's DID+VC technology to achieve seamless login and end-to-end encryption features similar to cellular networks.

Roam encourages users to participate in network co-construction by sharing Wi-Fi nodes or upgrading to OpenRoaming™ Wi-Fi. Users can seamlessly connect between four million OpenRoaming™ hotspots worldwide, significantly expanding network coverage. At the same time, Roam's eSIM covers over 160 countries globally, providing users with flexible and efficient network connectivity solutions.

Through diversified incentive mechanisms, users can earn global data traffic or Roam points tokens by signing in, inviting friends, and other methods, creating a continuous and stable income channel.

Communication-Based Value Exchange Network

The transformation of the Blockchain communication network could bring significant breakthroughs. Essentially, this is upgrading the communication network to a value exchange network, transitioning from a "transmitting information" model to a "transmitting information + value + trust" triadic network, becoming the next-generation digital society foundation that integrates value transmission, data ownership, and trust collaboration.

From a historical perspective, the evolution of communication technology has profoundly restructured the financial payment system. Each technological breakthrough has brought a qualitative leap to payment forms, continuously driving reforms in the financial payment field through three dimensions: enhancing information transmission efficiency, expanding connection boundaries, and reconstructing trust mechanisms.

1. Information transmission efficiency: Deconstructing the barriers of value transmission across time and space. From telegraphs to Blockchain, the payment cycle continues to shorten, significantly improving efficiency.

2. Connecting Boundary Expansion: Building the Nerve Endings of Inclusive Finance. Mobile communication technology extends payment nodes to every corner of the physical world, providing financial services to remote areas. IoT communication technology is creating new payment scenarios.

3. Trust Mechanism Reconstruction: InTrustlessWeTrust. Blockchain technology provides the foundation for building a world without trusted intermediaries, but how to construct a trust mechanism on blockchain networks still needs exploration.

The "on-chain bank" based on Blockchain and Web3 can already realize various traditional banking functions, such as savings, investment management, transfer, payment, etc. These services can be used with just an internet connection, providing new possibilities for inclusive finance. In the future, it may give rise to new forms such as a "global instant settlement network" and "AI autonomous financial entities."

Future Outlook

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

1. Basic communication operators: continue to play the role of "pipeline workers", controlling the physical layer infrastructure, but open network capabilities through APIs for DePIN projects to call.

2. Service Operators: Similar to Roam, based on communication networks and Blockchain technology, reconstructing itself as a value routing hub in an open protocol manner, carrying out communication-based ecological businesses globally.

3. User Layer: Transitioning from "passive consumers" to "ecosystem builders" to promote the development of the Web3 communication ecosystem.

The ideal state of the Network State needs to be built on communication networks. Web3 decentralized telecom operators like Roam may become the digital foundation of the ideal state. The blockchain reconstruction of the telecom industry will provide a solid foundation for future digital civilization.