By: Ryan Gold

We are nearing the end of a full decade in which the telecommunications community has been talking, experimenting, and failing with digital transformation initiatives. An entire industry that used to be at the forefront of innovation is quickly becoming a commodity, providing basic connectivity services. 

The old model of monetizing messaging, minutes, and data has been undermined by Over-the-Top (OTT) applications that provide similar services, but with better experiences at a lower cost and often for free. It’s understandable why our industry is struggling to compete. Those OTT service providers are free to operate without the yoke of regulations; we are not. They are able to operate globally at scale, where volumes make up for a low individual price point; we are not. They can exploit alternative business models by selling access to customer data and usage insights; we cannot.

However, there is something new on the horizon that, if adopted at scale, has the potential to disrupt the market while also providing a new leading role for telco operators. Web3 aims to create a more secure, private, and decentralized structure for the internet that will enable a massive shift away from centralized platforms and towards a new norm of communicating, storing information, and making payments by using secure, immutable, and decentralized blockchain technologies. This transformative wave is set to revolutionize how data, identities, property rights, and content are owned and controlled by the end user. 

Web3 is still evolving as a concept and adoption is still low. Today, the typical user tends to be a technology enthusiast with a niche focus. The most visible use cases typically involve cryptocurrencies and non-fungible tokens (NFTs), which are often perceived as gimmicks or – in the worst case – as scams. The underlying technologies and concepts, however, are sound. To achieve mainstream Web3 adoption, it is imperative to better define the market value, create real-world use cases, and build trust. This is where Telco operators have a role to play.

We are already seeing the impact of Web3 market disruption happening, but it is other industries that are taking the lead. Forward-thinking governments are defining digital identification standards, popular brands are launching token-based loyalty programs, and new market entrants are providing financial services for under-served communities. In order to not repeat the missed opportunities of the past, telco operators must stake their claim as key enablers of Web3 to the market.

How Will Telcos Help Accelerate the Slow Web3 Adoption?

Telco operators are already uniquely positioned to be the gateway to Web3. They are trusted entities. They function within regulated environments. They provide services on a local basis. They know their customers (KYC). They are bound by data privacy and protection laws. They provide trusted connectivity.