Seven ways telecom operators can power the metaverse

1. Drive the development of human interface hardware

Devices such as augmented reality (AR) and virtual reality (VR) headsets, gaming consoles and smartphones will be used by humans to interact with the metaverse. These devices will act as the gateway into virtual worlds.

VR technology is not new, and it is clearly less popular among consumers when compared with smartphones. Current VR technology needs to be improved around areas such as portability, resolution, responsiveness and field of view to bring it into the mainstream.

The metaverse will no doubt act as a catalyst for these devices, and operators can seize this moment to collaborate with device vendors to drive their adoption, for example through selling bundled VR devices and connectivity services to consumers. However, operators will have to unlock value from these devices by adopting an end-to-end (E2E) “device lifecycle management” approach.

Operators can also invest in device innovation as well as execution of key levers to drive profitability, such as securitization, re-commerce and insurance.

2. Become the lead connectivity provider

The development of the metaverse and the broadening of virtual worlds are directly tied to connectivity.

5G services are meant to deliver higher multi-gigabits-per-second (multi-Gbps) peak data speeds, ultralow latency, greater reliability and a uniform experience. As 5G networks are commercially deployed, 5G will help consumers and businesses enter the metaverse.

As we approach 2030, the telecom industry is expected to witness another generational shift in wireless technology toward 6G services. 6G data transfer speeds will be higher, and latency will go down – providing further impetus to the metaverse.

The development of the metaverse will also be fueled by fiber connectivity, which delivers high-bandwidth speeds. Going forward, the off-loading of wireless traffic through Wi-Fi 6 – the latest generation of Wi-Fi – will help address network capacity- and efficiency-related challenges.

3. Be positioned to provide edge computing services

The metaverse will require huge amounts of computing power, real-time rendering and AI computing capabilities. The requirements for the underlying computational power are hundreds of times higher than what we have today.

Given the rise in computing requirements, edge computing will be another essential building block in the metaverse. In the future, when millions of people are having continuous virtual experiences in real time, the cloud will not be able to centralize and store all the resources involved.

Due to latency requirements, this data will need to be distributed and made available closer to the point of consumption. This puts operators in a prime position to provide edge computing services and unlock more efficient data transfer, enhance perimeter security, relieve network congestion, and diversify their revenue streams in the process. To succeed, operators should align their edge cloud strategies with their legacy cloud initiatives and ensure they have the right partnerships in place with specialist cloud providers.

4. Enhance advanced analytics and AI capabilities to bolster revenues

The metaverse will involve collecting large amounts of data and determining how it can be collected, stored and repurposed will be crucial.

The historic need to extract insights from call data records means that telcos have long had greater access to big data insights, compared with other industries.

In the metaverse, operators will have many advantages when it comes to repurposing data to improve decision-making and creating new demand scenarios.

A wealth of product, customer and asset data will reside with telecom operators within the metaverse, while their legacy retail and distribution capabilities will also provide a range of customer- and operations-related insights.

As a result, telecom operators should pay special attention to fostering the right analytics and AI capabilities and define potential monetization avenues to further bolster their revenues.

5. Put cybersecurity, privacy and trust at the heart of metaverse services

As we move into the metaverse, vast amounts of critical data will be processed. With enterprises and telecom operators coming together in new ways, it is critical that both privacy and security are prioritized.

Today, consumers and businesses are ever more concerned about their digital footprint and the integrity of their personal data. Interestingly, operators have a unique advantage to address these concerns, since they tend to be more trusted by consumers as data custodians, compared to other types of TMT provider.

Identity authentication and management will become more important as virtual worlds become more sophisticated. Operators should leverage their existing customer relationships to position themselves as identity management experts as the metaverse takes shape.

6. Develop metaverse platforms

Many companies are launching their own metaverse platforms and success is expected to depend on drawing as many subscribers as possible. The key will be to create interesting, themed experiences and events that make everyday users spend more time there, as well as offering customized services for businesses and consumers.

Initially, the metaverse platform will be developed by gradually combining a series of large and small virtual worlds based on the real world. However, in the medium to long term, after several years of development, a super virtual world would eventually be formed.

In order to take advantage of this gradual evolution, operators should be prepared to invest in emerging metaverse platforms. This will help them build a deeper understanding of the demand scenarios and technical competencies shaping the long-term opportunity.

7. Be a key orchestrator of the ecosystem

As operators further refine their strategies to engage with the metaverse, they should form new partnering frameworks to unlock growth.

To achieve this, closer relationships with different participants in metaverse ecosystems is essential. Relationships with device manufacturers and technology platform providers should pivot toward the long-term opportunities afforded by virtual and augmented reality.

Meanwhile, relationships with industry vertical customers can also be strengthened by identifying new collaboration opportunities. Discussion with policy-makers will also help operators position themselves as orchestrators of the metaverse ecosystem.

Leveraging experience to look to the future

Telecom operators are not new to the challenges of the metaverse. Along with the big technology players, telcos were among the first ecosystem players to start exploring it.

In some developed markets, they have already started to delve into metaverse-based platforms that combine multiple technologies – especially 5G – to bring the internet to life.

This exploration, however, needs to expand beyond technological proofs of concept and cover the full spectrum of a telco’s organization, from its business model to reimagining its technology stacks and asset base to enable them on their journey. We recommend telecom companies explore and develop these key dimensions of change to better identify and maximize the opportunities the metaverse promises: