The metaverse is coming, and telecom providers have the chance to get ahead of the game by investing in the high-speed, low-latency connectivity that it requires.

Cloud infrastructure and connectivity are key enablers of the metaverse. Nobody likes waiting for things to load. This will be even more noticeable in real time, content-heavy, virtual reality metaverse experiences. Metaverse use cases require end-to-end low-latency, high bandwidth connectivity to proximally located edge compute resources.

At the beginning of the Covid-19 pandemic, operators reported a significant increase in network traffic overnight as entire workforces transitioned to entirely working from home. Operators had to quickly deploy additional resources to meet the demands of increased video conferencing, streaming, file syncing and remote desktop working.[1]

Widespread adoption of immersive metaverse experiences, coupled with billions of people in developing countries connecting for the first time (not to mention the billions of internet-connected machines sending messages autonomously), will herald a never-before-seen step-change in traffic patterns and demands on telecom operators.

It’s up to providers to give end users the power to reach the metaverse. By focusing on areas like edge cloud, cyber security, and AI, providers can become key players in the metaverse ecosystem and secure their future in the process.[2]

Metaverse-capable infrastructure and connectivity will require significant upgrades to existing network capabilities and infrastructure, including high-speed, low-latency connectivity and powerful computing resources. This may require significant investment and coordination among multiple stakeholders, including telecom providers, tech companies, and government bodies. Ensuring widespread adoption and penetration of metaverse-capable infrastructure and connectivity to allow everyone to access the metaverse requires overcoming longstanding challenges such as rural coverage and user adoption.

While the metaverse is full of exciting media-rich use cases, the practicalities of physically delivering the metaverse to the masses deserved more attention. Everyone realises network infrastructure is crucial for connecting users, and yet it wasn’t even mentioned in the Meta Connect 2022 keynote.[3] Nonetheless, telecom providers are well-positioned to adapt their offerings to meet expected demand and early adopters will benefit.[4] Examples of this are already happening, with NTT Docomo, a Japanese mobile provider, investing $4.1bn to develop Web3 infrastructure and services based on blockchain.[5]

The success of the metaverse relies on fast and reliable connectivity, but current networks and infrastructure are not up to the task of enabling users everywhere to have the full experience. To overcome this, telecom providers are being called upon to upgrade their capabilities and infrastructure, with a focus being placed on providing low-latency, high-bandwidth and widely available connectivity to ensure the success of the metaverse. Early adopters stand to benefit greatly from this and can help drive demand for these novel uses of connectivity. As we move towards a world where the metaverse becomes more widespread, providers are preparing to deliver the necessary network support to make the metaverse a success.

As the excitement around the metaverse continues to grow, telecom providers are presented with a huge opportunity to future-proof their businesses by investing in the necessary infrastructure to support this immersive virtual world. Providers are well-positioned to plug the current gaps highlighted, and the metaverse offers a range of opportunities for providers to also leverage their existing expertise in other areas like edge cloud, cyber security, data analytics, and AI to become key players in the metaverse ecosystem.

There are however a number of challenges from a telecommunications perspective to making the metaverse a widely adopted, commercially viable reality:

• Connectivity issues are broader than just for the metaverse. Ensuring all citizens have access to superfast broadband connections and can engage with the digital world is a priority for many countries around the world. The European Union and the United Kingdom have ambitious goals and targets in place for the provision of high-speed internet, with the EU aiming for 100 Mbps coverage by the end of 2025 and gigabit connectivity by 2030.[6] The UK, meanwhile, aims to have gigabit-capable broadband reach at least 85% of homes and premises by 2025, with 99% coverage by 2030.[7] Ofcom’s data suggests that around 70% of UK homes already have access to gigabit broadband.[8] Experts estimate that for the metaverse to function properly, a minimum of 300 Mbps is required, with ideally 1Gbps upload/download capacity – which is expected to grow to many times that as services and content advance.
• Making the infrastructure investment business case. There is currently a lack of widespread adoption and demand for metaverse technology[9] as a driver for investing in expensive infrastructure and connectivity upgrades. This “chicken-and-egg” scenario makes it difficult for telecom operators to justify investing in the necessary infrastructure and connectivity needed for seamless metaverse experiences without first seeing more concrete evidence of the metaverse’s take-up and viability.
• Time-limited first mover advantages. More providers entering the market offering similar services will quickly lead to increased competition and commoditisation in the market for metaverse-capable infrastructure and connectivity. This will lead to price wars, and margin erosion, making it difficult for operators to differentiate themselves and generate sufficient revenue from their metaverse-related activities. This will be particularly problematic for first movers who expend significant capital establishing initial metaverse-capable services.
• Decentralised networks? Some of the legal challenges that telecommunications operators may face when providing metaverse-capable infrastructure and connectivity include the lack of a central authority, which is inherent to decentralised networks.[10] This could make it difficult to observe or regulate illegal behaviour or transactions. In addition, the immutable nature of blockchain-based systems could raise legal issues, such as a user’s right to erasure in the context of data protection.

The metaverse offers a range of opportunities for providers to leverage their existing expertise in not only a “traditional” telecom’s function, but also in vital areas like edge cloud, cyber security, data analytics. Ultimately, by capitalising on their experience and fostering partnerships with other players in the ecosystem, telecom providers have the potential to be more than just a cog in the supply chain and emerge as critical players in the world of the metaverse.

References

[1] See, for example, Implications of the COVID-19 Pandemic on the Internet Traffic – https://ieeexplore.ieee.org/document/9399711

[2] EY: Seven ways telecom operators can power the metaverse – https://www.ey.com/en_gr/telecommunications/seven-ways-telecom-operators-can-power-the-metaverse#:~:text=Telecom%20operators%20stand%20to%20benefit,services%20and%20increase%20operational%20efficiency.

[3] Meta Connect 2022: https://tech.fb.com/ar-vr/2022/10/meta-connect-2022-keynote-recap-quest-pro/

[4] CSPs play a key role in the metaverse in areas that were not included in the Meta Connect 2022 keynote: https://www.analysysmason.com/research/content/articles/meta-connect-overview-rdmm0-rdmb0-rdcs0-rdmd0-rdvs0-rdmy0-rdmv0/?utm_term=READ%20MORE&utm_campaign=Analysys%20Mason%20Insight%3A%20Metaverse%20%7C%20Transport%20network%20spending%20%7C%20Satellite%20and%20terrestrial%20networks&utm_content=email&utm_source=Act-On+Software&utm_medium=email

[5] NTT Docomo to invest $4bn in Web3 using mobile infrastructure: https://asia.nikkei.com/Business/Technology/NTT-Docomo-to-invest-4bn-in-Web3-using-mobile-infrastructure?utm_campaign=7am+Insights+9-Nov-2022&utm_content=7am+Insights+9-Nov-

[6] Digital Economy and Society Index (DESI) 2022: https://digital-strategy.ec.europa.eu/en/library/digital-economy-and-society-index-desi-2022

[7] Project Gigabit Delivery Plan – summer update: https://www.gov.uk/government/publications/project-gigabit-delivery-plan-summer-update-2022/project-gigabit-delivery-plan-summer-update-2022#progress-towards-a-gigabit-uk

[8] EU Publishes 2022 Broadband Connectivity Progress Study vs UK: https://www.ispreview.co.uk/index.php/2022/08/eu-publishes-2022-broadband-connectivity-progress-study-vs-uk.html

[9] Statista – Brand-related attitudes towards the metaverse among internet users in the United Kingdom and the United States as of August 2021: https://www.statista.com/statistics/1282492/consumer-attitudes-metaverse-brands-internet-users-uk-us/

[10] Regulating The metaverse: Can We Govern The Ungovernable?: https://www.forbes.com/sites/martinboyd/2022/05/16/regulating-the-metaverse-can-we-govern-the-ungovernable/?sh=38e67a6d1961