Web3 Communication Revolution: How Blockchain Reshapes the Traditional Telecommunications Industry

Under the impact of the global digitalization and informatization wave, the traditional business model of the telecommunications industry is facing unprecedented challenges. The promotion of 5G technology has brought tremendous upfront investment pressure to operators, but the business revenue model has not seen significant improvement, and value-added services have also failed to achieve breakthrough development. On the contrary, the industry has fallen into fierce competition in the stock market.

Data shows that although leading telecommunications companies in the United States generate revenue exceeding that of internet giants by 50%, their profitability is only 30% of the latter. The profit margin in the telecommunications industry is only 20% of that of internet giants, with net income maintaining around 5%, and market capitalization is merely 30% of that of internet companies. This reflects investors' lack of confidence in the heavy asset investment model and low growth potential of the telecommunications industry.

The telecommunications industry has been seeking transformation. Looking back at the experience of participating in the virtual operator business in 15/16, the openness of the telecommunications industry to private enterprises did not address the fundamental issues, whether in terms of existing competition or deepening the industry; none of these were essential transformation solutions. At that time, there was also an exploration of overseas expansion, attempting to collaborate with Europe's largest virtual operator, Lebara Mobile, but it could not be advanced due to various reasons.

Now reflecting, the eSIM global roaming scenario that was originally envisioned is actually very suitable for implementation through Web3, and can be promoted through the Blockchain value transfer network to enhance value-added services. Unfortunately, at that time, Blockchain and Web3 technologies had not yet emerged, otherwise the industry landscape might be very different.

This article will discuss the solutions to the pain points in the traditional telecommunications industry based on its current situation, focusing on the role of blockchain technology and the Web3 operating model. We will take the example of the Web3 decentralized telecom operator Roam to analyze in depth how blockchain and Web3 can reconstruct the telecommunications industry, upgrading communication networks to value exchange networks, and what transformations this will bring to the industry.

1. The Business Model of Traditional Telecom Operators Faces Challenges

The business model of traditional telecommunications operators is centered around communication network infrastructure, achieving profitability by providing telecommunications connectivity services, value-added services, and industry digital solutions, while continually transforming amidst technological iterations and market changes. Its core logic can be summarized as a three-layer architecture of communication "connection + ecosystem + service."

Basic communication services remain the main source of revenue, including mobile data, home broadband, and enterprise leased lines. The popularity of 5G packages and gigabit fiber has driven the growth of data traffic revenue, but traditional voice and SMS revenue has significantly declined due to the replacement by instant messaging applications. In response to this trend, operators are enhancing user stickiness through bundled sales, such as "broadband + IPTV + smart home" packages. At the same time, value-added services have become a new growth engine, covering areas such as cloud services, the Internet of Things, and fintech.

In terms of cost structure, operators face dual pressures of heavy asset investment and refined operations. The construction of 5G base stations, spectrum auctions, and data center investments have driven up capital expenditures, with global operators investing over $300 billion annually. To reduce costs, the industry commonly adopts measures such as co-construction and sharing, AI energy-saving technologies, and network virtualization. However, in the fierce competition of the existing market, the cost of customer acquisition remains high, with terminal subsidies and channel commissions accounting for more than half of marketing expenses, forcing operators to shift towards digital direct sales.

The main challenges facing the industry come from technological iteration and cross-border competition. Traditional business is clearly declining, with global voice revenue decreasing by an average of 7% per year, SMS revenue shrinking by 90%, 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 faces the impact of emerging competitors such as satellite broadband and cloud vendors' edge computing.

The transformation path of traditional telecom operators focuses on technological upgrades and ecosystem reconstruction. On the technological level, network slicing, edge computing, and open architecture have become key. In terms of ecosystem construction, operators are shifting from "traffic pipelines" to "digital service engines", such as South Korea's SKT launching a metaverse platform and Jio integrating e-commerce and payments to create a super app. ESG strategies have also become a means of differentiated competition, with several operators committing to achieving renewable energy supply and carbon reduction goals.

2. Challenges of Competition in the Existing Market and Overseas Expansion

The telecommunications industry, which previously relied on the growth model of a huge existing market and basic communication service fees, can no longer support the massive capital investment and operating costs of the 5G era. The market has entered a stage where several major operators are fiercely competing in the existing market while each is deeply cultivating niche markets.

This is not only a dilemma faced by the telecommunications industry but also a microcosm of the current overall market economy. Although "going abroad" is seen as a breakthrough, it is not an easy task for telecommunications operators. Since communication is a sensitive industry in various countries, the overseas expansion of telecommunications operators faces many obstacles:

1. Market access restrictions: Most countries restrict foreign investment shareholding ratios through legislation, require localized operations, and even directly prohibit foreign participation.

2. Spectrum allocation rules vary: the 5G frequency bands are not unified across countries, requiring operators to customize equipment, which increases cross-border deployment costs.

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, making it difficult for outsiders to break user inertia.

5. Price Wars and Subsidy Culture: Emerging markets rely on low-cost packages and mobile subsidies, and multinational operators must bear high cost pressures.

In response to these difficulties, operators have attempted various overseas expansion strategies, such as equity investment, joint ventures, and virtual operators. However, these methods ultimately still struggle to escape the predicament of limited market stock competition, massive capital investment, and uncertain returns.

Therefore, the "going global" strategy of telecom operators presents the characteristics of "global capability, local delivery":.

• Core Network Layer: Build a global backbone network through submarine cables, satellites, and cloud services, but must comply with the data sovereignty rules of each country.
• Technical Standards Layer: Under the trend of "technological camp formation" in 6G research and development, operators need to choose a position in the standard split.
• Service application layer: Highly localized, relying on joint venture partners or local teams for operation.

3. Web3 Reconstructing a New Paradigm for the Telecommunications Industry

Clearly, limited globalization and surviving in a niche market are not ideal choices. We can reconstruct the telecommunications industry through blockchain technology and Web3 operational models. This reconstruction is not simply "blockchain +", but an upgrade of the communication network to a foundational value exchange layer through globalization, token economy, distributed governance, and open protocols, to support the future digital civilization. If operators refuse to change, they may become "pipe workers"; if they embrace reconstruction, they are likely to become the routing hub of the next generation value internet.

At the infrastructure level, physical network resources are distributed and shared through tokenization. The Web3 decentralized telecom operator Roam has verified the feasibility of incentivizing users for contributing Wi-Fi hotspots with tokens, establishing a decentralized communication network covering millions of nodes and over two million users, challenging the monopoly model of traditional operator base stations. The DAO governance of spectrum resources (, such as the "5G Spectrum NFT" trial by British Telecom ), allows idle frequency bands to be auctioned on demand, enhancing utilization and creating shared revenue through smart contracts. User identity management is also undergoing innovation, with decentralized identity ( DID ) solutions allowing users to have autonomous control over their SIM card data, with operators acting only as verification nodes, reducing the risk of privacy leaks. Data sovereignty further returns to users, with blockchain data markets allowing users to trade anonymized behavioral data and earn token rewards.

The automation of cross-border services and settlements has become another breakthrough. Blockchain reconstructs international roaming clearing, compressing the settlement cycle from 30 days to real-time accounting, reducing costs by 40%. The DeFi model is introduced into the tariff system, allowing users to obtain communication discounts by staking stablecoins, while operators issuing dedicated tokens may reshape the payment ecosystem. In the field of the Internet of Things, the combination of blockchain and edge computing gives rise to autonomous device networks, achieving low-latency communication and enhancing supply chain credibility.

In terms of economic models, communication and finance achieve atomic-level integration: users can earn profits by sharing bandwidth, data, or even physical activity while paying for services with cryptocurrency, forming a "consumption-production" closed loop. DeFi mechanisms give rise to innovative services such as communication insurance and cross-chain roaming, while on-chain smart contracts automatically execute cross-border settlements, reducing costs by over 40%.

Case: Web3 Decentralized Telecom Operator Roam

Roam is committed to building a global open wireless network that ensures free, seamless, and secure network connections for humans and smart devices, whether stationary or in motion. Compared to the geographical limitations and business homogeneity of traditional telecom operators, Roam leverages the global advantages of Blockchain and constructs a decentralized communication network based on the OpenRoaming™ Wi-Fi framework, while also integrating eSIM services to create a globally open and free wireless network.

After more than two years of development, Roam currently has 1,729,536 nodes and 2,349,778 application users in 190 countries around the world, conducting 500,000 network verification activities daily, making it the largest decentralized wireless network in the world. In addition, Roam users can also receive free eSIM data when building and verifying Wi-Fi nodes, making Roam a telecommunications service provider capable of operating in an internet model.

Roam collaborates with the Wi-Fi Alliance and the Wireless Broadband Alliance (WBA) to combine traditional OpenRoaming™ technology with Web3's DID+VC technology to build a decentralized communication network. This not only reduces the high upfront costs of global network construction but also achieves seamless login and end-to-end encryption features similar to cellular networks. Users do not need to log in repeatedly and can connect to Wi-Fi as seamlessly as using cellular data, significantly enhancing user experience and connection stability.

Roam encourages users to participate in network co-construction through the Roam App, sharing Wi-Fi nodes or upgrading to the more secure and convenient OpenRoaming™ Wi-Fi. Users can enjoy seamless connectivity between four million OpenRoaming™ hotspots worldwide and find Roam's self-built network nodes in remote areas, significantly expanding network coverage and enhancing user experience.

At the same time, Roam's eSIM provides key support for its vision of a globally open wireless network. Users can activate data plans directly on their devices without the need for a physical SIM card, greatly simplifying the usage process. Roam eSIM covers over 160 countries worldwide, offering travelers and business professionals a flexible and cost-effective network connectivity solution.

Roam promotes the rapid development of decentralized networks through global free access via Wi-Fi + eSIM and a diverse incentive mechanism. Users can earn global data traffic or Roam points tokens by checking in, inviting friends, or interacting with Roam's social media, providing users with a means to create a continuous and stable income stream.

4. Communication-based Value Exchange Network

The reconstruction of the telecommunications industry through Blockchain and Web3 essentially upgrades the communication network to a value exchange network, transitioning from "information transmission" to a triadic network of "information + value + trust," becoming the next generation digital societal foundation that integrates value delivery, data rights confirmation, and trust collaboration.

The infrastructure of Web2 has achieved frictionless, almost free information flow, but the value within it has not circulated. The value internet of Web3 can provide a carrier for these values, allowing them to flow as frictionless and nearly freely as information. In this context, the essence of payment is value.