For telecom operators, the metaverse offers opportunities on entertainment and could partner with technology companies.
The booth of the newly named "Meta" has attracted a lot of interest at MWC 2022. Telecom operators are discovering new business opportunities in this technology but are also wondering about the risks involved in this new 3D internet. With a market size forecast of close to a billion1 dollars by 2024 according to a study by BCG2, what role(s) can telecom operators expect to play in the short and medium-long term in this emerging universe?
What Are the Market Opportunities for Telcos?
Infrastructure Providers on the Short Term
The metaverse is in its infancy and represents many challenges that telecom operators will have to address in the coming years. These are naturally expected on the primary layer of the value chain: the infrastructure. Edge computing, for example, including 5G/Edge, fiber and Wi-Fi, will address the challenges of very low latency, high throughput and high computational power needed to interact with virtual environments. Better still, given the considerable cost and weight of the devices needed to access it, ergonomic and subsidized AR glasses or VR headsets could be offered to users to facilitate entry into these worlds.
In addition, operators could position themselves in the second fastest growing segment of the metaverse market by 2024 according to Statista: live entertainment. These are immersive experiences during concerts or live sports events, which are increasingly promoted as video game manufacturers offer a 3D dimension to their titles and integrate communities similar to those found on social networks. Operators would be able to offer quality experiences with flawless broadband connectivity.
To quickly monetize the metaverse, operators could also partner with technology companies that provide software, such as Microsoft, to complement their connectivity solutions.
Guardian of the Security and Interoperability of the Multiverse in the Medium-long Term
The metaverse is made up of a multitude of multiverses, managed independently of each other by autonomous companies that have their own organization. In order to build a bridge between these different spaces, their users and their content (photos, ideas for example), telecom operators could collaborate with each other, and also with companies mastering these technologies, in order to develop metadata, protocols and standardized registers for digital assets and avatars. This is similar to the current sharing of network coverage to enable calls, roaming and messaging to work. Telcos could even position themselves as consultants to these multiverse managers, while providing them with recommendations such as common rules governing these spaces, which will make the transfer of content from one universe to another more fluid.
Still in a facilitating role, operators could adapt their current billing systems to convert the value of physical currency into virtual currency useful for payment in the metaverse (like the sale of airtime in the past for example).
As guarantors of security, they could also meet the challenges of the vulnerability of digital properties to fraud, notably by relying on certificates of authenticity. Telefonica is a forerunner in this area, as the Spanish operator has enabled the creation of a collection of NFTs4 from a series of drawings by artist Ferran Adria using the TrustOS solution. In the same logic, operators could continue to fight against false declarations, by providing an authentication system via a secure channel such as messaging offers today.
Finally, the metaverse raises the issue of isolation from the real world, representing a threat for all users. In this sense, operators could market additional hardware such as IoT sensors or cameras integrated into VR (virtual reality) headsets, which would detect stimuli from the outside world and send them to users in the form of notifications or even alerts. Thus, to ensure the safety of their physical integrity and that of their loved ones, users would be alerted to the crying of a child or the presence of smoke in the vicinity for example. These smart sensors should be connected and managed by dedicated platforms provided by the operators themselves.
Although all these market opportunities can be seized by the latter, the challenge is to quickly and precisely define one or more strategies in order to guard against the risks linked to the metaverse.
Strategies and collaboration between stakeholders
Decentralization of the metaverse and regulation requirements
The development of the metaverse also raises important governance issues. Indeed, the dominance of this universe by a major player would entail risks, especially in the collection and management of users' personal data for marketing campaigns. To avoid such a "catastrophic" scenario, in the words of Herman Narula, current president of Improbable Worlds Limited, the metaverse ecosystem should be supported by decentralization mechanisms provided by the operators themselves. Thus, the positioning of regulators in this open space will be necessary to secure both companies and individuals, especially in the case of fraud. This would then allow users to feel reassured.
To achieve this, the coordination of operators with technology companies could be an interesting avenue, without however preventing a healthy competition that will have to be established between the players to allow operators to derive greater value from the metaverse.
Towards independent operators
Some operators are already arming themselves by creating their own platforms for socialization, training and even entertainment on the metaverse, such as the Korean operator SKT with Ifland. Moreover, to give more weight to this project and increase the number of users on their platforms in order to compete with those of technology companies, an association of operators is not to be excluded, as is the case of SKT with Deutsche Telecom. So the metaverse for operators is still in its infancy, but promising.
Sofrecom’s first metaverse mission
In the framework of these first articles about the metaverse, we wanted to share with you the first mission carried out by Sofrecom for a subsidiary of Orange in order to assist it in developing a strategy to prepare for the Metaverse.
Orange wishes to elaborate a strategy in preparation for the metaverse
To this end, Sofrecom proposed a panorama of initiatives around the metaverse and how to capture more of the value, beyond simple connectivity. This benchmark allowed to produce a practical guide around the metaverse in order to better understand this new concept and its operational applications for telecom operators.
No doubt that in the next months, other missions by Sofrecom will follow in order to continue to develop our expertise on this new topic.
 10^12 dollars
 Source: GlobalXETFs,AppAnnie,Zenith,GrandViewResearch,BCG.
 Source: Bloomberg,Newzoo,IDC,TwoCircles,Statista.
1 NFTs : non-fungible tokens which are unique and non interchangeable