Monday, 6 June 2022

How Can/Should Telcos Capitalize on the Metaverse?

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Telcos largely missed out on the riches of the internet, with many finding themselves offering “dumb pipes” to carry data-rich consumer applications for the likes of Amazon, Google or Netflix, which continue to reap all the rewards. As they pump billions of dollars into rolling out the 5G network, many are intent on not making the same mistake again. There will be no “metaverse” and no “Web3” without the technical infrastructure connecting people and things together.

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“There is an opportunity for telcos to regain lost opportunities and get deeper into the network and delivery of metaverse services, and also recoup some of their capital investment in 5G,” says Vlad Dobrynin, ​​founder and CEO at HUMANS.uz, an Uzbekistan-based fintech platform.

“5G is only one element in a wider connectivity solution. Other elements include the creation of mesh networks and 10G cable networks.”

Yet 6G is beginning to wend its way through standardization committees “because digital advancements such as the metaverse tend to accelerate change in technology formats,” says Dobrynin, writing at VentureBeat. “In a world where graphics will have to be rendered on-screen in direct response to where someone is focusing via their headset, things will need to move an order of magnitude faster, which requires single or low double-digit millisecond latency.”

This is going to require vast enhancements in capacity and fundamental shifts in how networks are architected and deployed, which in turn will mean a huge industry-wide collaboration spanning tech companies, mobile network operators, policymakers and everyone in between.

Meta understands this, which is why it is investing millions in everything from subsea cables and satellites to autonomous internet-beaming drones. It has also joined forces with Spanish telecom giant Telefónica to build something they call the Metaverse Innovation Hub in Madrid. Among other things, the venture will provide local startups and developers with access to a 5G lab, where they will be able to utilize a metaverse end-to-end testbed on Meta and Telefónica’s network infrastructure and equipment.

China Mobile, Verizon and SK Telecom have also moved to build platforms founded on blending the digital world with real-life environments as they look to recoup 5G investments.

“But it’s impossible to get back 5G investments through traffic fees alone, says Dobrynin. “Consumers are not willing to pay for traffic any more. Moreover, regulators generally do not support the rise in prices for basic services, and internet access is a basic need now. Telco operators definitely need to look for new business models and business streams to return their investment in 5G.”

A simple example is the creation of a road for self-driving cars with users paying for traveling on the road. Another example is that the metaverse could have a paid registration in which users sign up for a membership. In this case, revenue is generated for the investor in the infrastructure, and not for the content owner in the metaverse. The fee for guaranteed data speeds, in a business conference, for instance, should also go to the owner of the infrastructure, and not to the operator of the communication platform,” says Dobrynin.

There is likely very little immediate income growth: “it can be decades before telcos see any substantial returns,” he says.

Yet the burning question for telcos is whether they will attempt to regain control over both consumers and services that access the metaverse network. And of course, this depends on how early they are into the market and what foundational work they might invest in to help develop the metaverse.

 


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