Communication Reconstruction: Blockchain Leading the Transformation of the Telecom Industry

In the wave of global digitalization, the traditional business model of the telecommunications industry is facing unprecedented challenges. Although the promotion of 5G technology has brought significant investment pressure to operators, the business revenue model has not improved correspondingly, and value-added services have yet to achieve breakthroughs, instead falling into intense competition in the existing market.

Data shows that while the revenue of leading telecommunications companies in the United States is 50% higher than that of internet giants, their profitability is only 30% of the latter. The profit margin of the telecommunications industry is only 20% of that of internet giants, with net income maintained at around 5%, and the market value is only 30% of that of internet companies. This reflects investors' lack of confidence in the capital-intensive investment model and low growth potential of the telecommunications industry.

The telecommunications industry is undergoing constant transformation. Previous attempts to engage in virtual operator businesses have not addressed fundamental issues; whether it is competing for existing users or delving deeper into the industry, no essential changes have occurred. The eSIM global roaming scenarios explored at that time were actually very suitable for implementation through Web3 methods and could promote value-added services through a Blockchain value transmission network. Unfortunately, at that time, Blockchain and Web3 technologies had not yet emerged, otherwise, a different situation might have unfolded.

This article will discuss the solutions of blockchain technology and Web3 operational models based on the current situation of the traditional telecommunications industry, and further analyze the impact of blockchain and Web3 on the reconstruction of the telecommunications industry through the case of the Web3 decentralized telecom operator Roam—what transformations will upgrading the communication network to a value exchange network bring to us?

Challenges Faced by Traditional Telecom Operators

Traditional telecom operators focus on communication network infrastructure, achieving profitability by providing telecom connectivity services, value-added services, and industry digital solutions. Their core logic can be summarized as a three-layer architecture of "Connection + Ecosystem + Service."

Basic communication services remain the main source of income, 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 have significantly shrunk due to the replacement by OTT applications. Operators enhance user stickiness through bundled sales, while value-added services have become new growth points, covering fields 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-building and sharing, AI energy-saving technologies, and network virtualization. However, the competition for users in the existing market keeps costs 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 in the industry come from technological iterations and cross-industry competition. Traditional business is visibly declining, with global voice revenue decreasing by an average of 7% annually, SMS revenue shrinking by 90%, and the per capita ARPU value dropping by 40% over the past decade. Despite the rapid growth of 5G users, the return cycle is long, and it faces challenges from emerging competitors such as satellite broadband and cloud vendors' edge computing.

The transformation of traditional telecom operators focuses on technological upgrades and ecological reconstruction. On the technical level, network slicing, edge computing, and open architecture have become key. In terms of ecological construction, operators are shifting from "traffic pipelines" to "digital service engines," entering the digital ecosystem through content platforms, super apps, and other means. ESG strategies have also become a means of differentiated competition, reducing policy risks while attracting socially responsible investments.

Competition in the Stock Market and Exploration Abroad

The past growth model relying on a huge stock market and the increase in basic communication service fees can no longer support the massive capital investment and operating costs of 5G. The market has entered a stage where several operators are fiercely competing in the stock market and each is deeply cultivating its own niche market.

This is not only a dilemma for the telecommunications industry, but also reflects the current overall market economic situation. For telecom operators, going abroad is not an easy task. As communication is a sensitive industry in various countries, telecom operators face numerous obstacles in their internationalization:

1. Market Access Restrictions: Most countries limit the foreign ownership ratio, require localized operations, and even directly prohibit foreign participation.

2. Differences in Spectrum Allocation Rules: The 5G frequency bands are not unified across countries, requiring operators to customize equipment and increasing the cost of cross-border deployments.

3. Data localization requirements: Many countries mandate that data be stored domestically and restrict cross-border data flows.

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-priced packages and mobile subsidies, while multinational operators face high cost pressure.

In response to these difficulties, whether through equity investment, joint ventures, or virtual operator models, it is challenging to completely break through regional limitations. Operators may need to adopt a strategy of "global capability, local delivery":

• Core Network Layer: Build a global backbone network, but must comply with the data sovereignty rules of each country.
• Technical Standard Layer: Choose technology camps in the research and development of new technologies such as 6G.
• Service Application Layer: Highly localized, relying on partners or local teams for operation.

The Possibility of Web3 Restructuring the Telecommunications Industry

Clearly, limited globalization and survival in niche markets are not the ideal answers. We can reconstruct the telecommunications industry through blockchain technology and Web3 operating models. This is not just a simple "blockchain +", but rather upgrading communication networks to a fundamental value exchange layer through globalization, token economics, distributed governance, and open protocols, to support the future digital civilization. If operators refuse to change, they may become "pipe layers"; if they embrace reconstruction, they are likely to become the hub of the next generation value internet.

On the infrastructure level, physical network resources are distributed and shared through tokenization. Certain Web3 telecom projects have validated the feasibility of incentivizing users who contribute Wi-Fi hotspots with tokens, creating a decentralized communication network that covers millions of nodes and challenges the monopoly model of traditional operators' base stations. The DAO governance of spectrum resources allows idle frequency bands to be auctioned on demand, improving utilization through smart contracts and generating shared revenue. User identity management is also undergoing innovation, with decentralized identity (DID) solutions allowing users to have control over their SIM card data, while operators act only as verification nodes. Data sovereignty is further returning to users, with certain projects allowing users to trade desensitized behavioral data and earn token rewards.

The automation of cross-border services and settlements has become another breakthrough. Certain alliances are reconstructing international roaming settlements using Blockchain, compressing the settlement cycle from 30 days to real-time distribution, reducing costs by 40%. The DeFi model has been introduced into the tariff system, allowing users to obtain communication discounts by staking stablecoins, while dedicated tokens may reshape the payment ecosystem. In the Internet of Things sector, the combination of Blockchain and edge computing is giving rise to autonomous networks for devices, such as smart cars automatically bidding for roadside base station resources, achieving low-latency communication.

In addition, in terms of economic models, communication and finance achieve atomic-level integration: users pay for services with cryptocurrency while earning returns by sharing bandwidth, data, or even physical activity, forming a "consumption-production" closed loop. The DeFi mechanism gives 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%.

Web3 Decentralized Telecom Operator Roam Case

Roam is committed to building a global open wireless network, ensuring that humans and smart devices achieve free, seamless, and secure network connections in both stationary and mobile conditions. Compared to the geographical limitations and business homogenization of traditional telecom operators, Roam leverages the global advantages of Blockchain, constructing a decentralized communication network based on the OpenRoaming™ Wi-Fi framework while integrating eSIM services to create a globally open and free wireless network.

After more than two years of development, Roam has over 1.7 million nodes in 190 countries worldwide, more than 2.3 million users, and conducts 500,000 network verifications daily, making it the world's largest decentralized wireless network. Users can also obtain free eSIM data while building and verifying Wi-Fi nodes, making Roam a telecommunications service provider that can operate in an internet model.

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

Roam encourages users to participate in network co-construction through the App, sharing Wi-Fi nodes or upgrading to OpenRoaming™ Wi-Fi. Users can enjoy seamless connectivity across four million OpenRoaming™ hotspots worldwide, and even find Roam self-built network nodes in remote areas, greatly expanding network coverage.

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

Roam promotes the rapid development of decentralized networks through global free access via Wi-Fi + eSIM and a diversified incentive mechanism. Users can earn global data traffic or points tokens by checking in, inviting friends, or interacting with Roam's social media, creating a continuous and stable revenue channel.

Communication-Based Value Exchange Network

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

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

From a historical perspective, the evolution of communication technology has profoundly restructured the development trajectory of financial payment systems, with each technological breakthrough bringing a qualitative leap in payment forms. From Morse code in the 19th century to the instant settlement of modern Blockchain payments, communication technology has continuously driven revolutionary changes in the field of financial payments through three dimensions: enhancing information transmission efficiency, expanding connection boundaries, and reconstructing trust mechanisms.

Information transmission efficiency: Deconstructing the barriers of temporal and spatial value transfer

The telegram technology has first realized the cross-time and space value transmission. After the transatlantic cable was opened, the interbank remittance time was shortened from several weeks to several hours. The SWIFT system has reduced the traditional cross-border payment cycle to T+1. The real-time communication capability created by the TCP/IP protocol in the internet era has compressed the completion time of electronic payments to the millisecond level. Blockchain replaces the centralized architecture of traditional finance with a P2P communication network, building a value transmission channel without intermediaries, improving communication efficiency by hundreds of times. The communication network based on Blockchain Web3 can also achieve a significant increase in value exchange efficiency.

Boundary Extension: Building Inclusive Finance Neural Endpoints

Cellular mobile communication technology will