• Fri. Jul 12th, 2024

Op-Ed: Why Now is the Time for Decentralization in Telecoms



Maria Lema, Co-founder, Weaver Labs

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Connectivity is one of the most important drivers in economic growth and has transitioned in the last 20 years to become a critical service. The demand has grown exponentially, largely driven by a heterogeneous set of consumers that require more sophisticated services where industries play an important role.

According to Ericsson’s Mobility Report, mobile subscriptions will continue to grow steadily to close to 9 billion worldwide, with data traffic continuing to grow at least 27 per cent yearly until 2025, mainly coming from video traffic.


There are multiple studies that measure the potential economic impact of 5G and Advanced Wireless and all agree that it’s in the order of Trillions of USD by 2025 when combined with all the other technologies it enables: Web3 driven applications such as the Metaverse, Big Data or the Internet of Things.

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The reality is that there are clear challenges in the telecommunications ecosystem to build the networks that are able to satisfy the ever-growing demand side. Current investment strategies for infrastructure coming from service providers are missing in terms of return on investment.

In fact, there was a race among all mobile network operators competing to become the first global network. According to the Financial Times, some of the largest investments in infrastructure from one single player have surpassed 7 billion USD in capital expenditure, a figure that does not include the billion dollar acquisitions to increase global presence.

Despite these investments, the telco industry has not received a sufficient share of this. If supply chains are to support the demand for Web3 and Metaverse applications, a decentralised approach is necessary to help incentivise investment into telecoms infrastructure. Ultimately, this will support the connectivity needed for the mass uptake of the wide range of specialised applications, including the much discussed Metaverse.

The decentralised approach

Decentralisation and tokenised economies are a solution to complex cross-actor engagements with mechanisms to reward network participants in exchange for contributions, and we have seen how this trend has picked up pace in recent times.

The opportunity for telecoms lies in the implementation of a software platform that, using decentralised principles, creates a network of networks as a solution to:

1. Access existing telecoms infrastructure and incentivise new assets to be deployed: Telecoms assets can be consumed in a “as a Service” model and by doing so operational and deployment costs can be reduced and revenue streams diversified. It can also help with adoption and stimulate innovation for new products and services.

2. Support an ecosystem with shared ownership and shared revenue models. This means moving from a model that is “Service Provider centric” to one that is “Infrastructure centric” — where anyone can access connectivity using an integrated infrastructure that is the result of multiple contributions from different actors. This approach can support network deployments in areas where investments by traditional players are disregarded.

3. Create agility and flexibility to access connectivity and deployment of new and innovative managed services. This means making public assets discoverable and accessible which in turn relies on the ability to collect asset attributes in a digital asset management platform and create a digital twin of each asset.


Why now is the time…

Soon, every major company, industry and consumer experience will be shaped, not just by the Metaverse, but also wireless connectivity in one way or another. However, if the reliance on a centralised internet system continues, telecoms infrastructure will lack the necessary investment to meet the demand for new technology applications.

However, in response to this, blockchain will help to build a horizontal scalable platform, which will break the reliance on command and control models. With the rising demand for telecoms driven applications like the Metaverse and IoT, prioritising decentralisation encourages greater investment into the supply chain.

In turn, decentralisation can better support the integration of Web3 into telecoms infrastructure by empowering diversification. Blockchain technology has the potential to bridge the gap between demand and supply with increased vendor competition creating scalable telecoms networks.

As a feature of blockchain technology, decentralisation will enable a marketplace of connectivity assets, meaning providers can then manage real-time communications traffic across infrastructure that belongs to a variety of actors, not just a big Internet Service Provider.

What’s more is that the openness (decentralisation) that characterises blockchain technology enables networks to have a transparent exchange of data or transactions, which is how blockchain creates an ‘internet of value’.

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Kevin Moore - E-Crypto News Editor

Kevin Moore - E-Crypto News Editor

Kevin Moore is the main author and editor for E-Crypto News.