Web3 Technology Reshaping the Telecommunications Industry: A Case Study of Roam

Under the current global wave of digitization, the traditional business model of the telecommunications industry is facing immense pressure. The widespread adoption of 5G technology has led to huge investments, yet the revenue model has not seen improvements, and value-added services have not achieved breakthroughs, resulting in fierce competition in the existing market. Data shows that while the revenue of leading telecommunications companies in the United States exceeds that of internet giants by 50%, their profits are only 30% of the latter, with profit margins as low as 20% and net income around 5%, while their market value is 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. Past attempts by virtual operators and others have not addressed the fundamental issues. Now, reflecting on this, the early envisioned global roaming scenario is actually very suitable for implementation through Web3, leveraging blockchain to promote value-added services. This article will explore the solutions that blockchain and the Web3 model offer for the current state of the telecommunications industry, and use the Web3 decentralized telecom operator Roam as an example to discuss how these technologies can upgrade communication networks into value exchange networks.

Challenges Facing Traditional Telecom Operators

Traditional telecom operators focus on communication infrastructure and profit by providing connectivity services, value-added services, and industry digital solutions. Basic communication services remain the primary source of revenue, but traditional voice and SMS revenues have significantly declined due to the replacement by OTT applications. Operators enhance user stickiness through bundled packages while expanding value-added services such as cloud services and the Internet of Things.

In terms of costs, operators face dual pressures of heavy asset investment and refined operations. The construction of 5G and spectrum auctions 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 technologies are widely adopted. The competition for market share in the existing market keeps costs high, with terminal subsidies and channel commissions accounting for more than half of marketing expenses.

The industry is facing challenges from technological iterations and cross-border competition. The decline of traditional businesses is evident, with the per capita ARPU value dropping by 40% over the past decade. The return on investment for 5G is long, and it also needs to cope with new competitors like satellite broadband and cloud providers. Operators are transforming from "traffic pipelines" to "digital service engines," building ecosystems through content, the metaverse, and more. ESG strategies have also become a means of differentiation.

Web3 Reshaping the Telecommunications Industry Solutions

Web3 technology can reconstruct the telecommunications industry from multiple levels:

At the infrastructure level, physical network resources are shared in a distributed manner through tokenization. The Roam model has verified the feasibility of incentivizing users with tokens for contributing Wi-Fi hotspots. The DAO governance of spectrum resources can enhance utilization and create shared profits. The decentralized identity (DID) solution allows users to have control over their SIM card data, reducing privacy risks.

Cross-border services and settlement can be automated. Blockchain reconstructs international roaming settlement, compressing the settlement period from 30 days to real-time, reducing costs by 40%. The DeFi model introduces a pricing system, allowing users to stake for discounts.

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

Roam: A Case Study of a Web3 Decentralized Telecom Operator

Roam is committed to building a global open wireless network, ensuring that humans and smart devices can connect freely anytime and anywhere. Based on the advantages of blockchain, Roam has built a decentralized communication network for the OpenRoaming Wi-Fi framework and has integrated eSIM services.

In just over two years, Roam has nearly 1.73 million nodes and 2.35 million users in 190 countries around the world, with 500,000 network verifications daily, making it the largest decentralized wireless network globally. Roam encourages users to participate in the co-construction of the network through innovative mechanisms, sharing Wi-Fi nodes or upgrading to OpenRoaming Wi-Fi.

Roam's eSIM covers over 160 countries worldwide, providing users with flexible and cost-effective connectivity solutions. Through a variety of incentive mechanisms, users can earn global data traffic or tokens by checking in, inviting others, and more, creating stable income streams.

Communication-based Value Exchange Network

Blockchain and Web3 are reconstructing the telecommunications industry, essentially upgrading communication networks to value exchange networks, achieving a trinity of "information + value + trust" transmission. This transformation promotes innovation in the payment sector from three dimensions: the efficiency of information transmission, the expansion of connection boundaries, and the reconstruction of trust mechanisms.

The blockchain-based Web3 communication network can greatly enhance the efficiency of value exchange. The global network built by Roam aims to provide inclusive financial services on the blockchain for 1.4 billion people who lack access to banking services. In the future, it may give rise to new forms such as a "global instant settlement network" and "AI autonomous financial entities."

Summary and Outlook

The telecom industry is undergoing transformation. In the future, a "centralized infrastructure + decentralized services" hybrid model may form: basic communication operators will continue to control the physical layer but will open APIs for DePIN projects to call; service operators like Roam will restructure themselves as the global value routing hub based on communication networks and blockchain technology.

Decentralized telecom operators like Roam in Web3 are expected to become the digital foundation of the ideal Network State. Users need to transition from "passive consumers" to "ecological co-builders" to jointly promote the development of the Web3 communication ecosystem.