Commerce’s shift to the metaverse is accelerating, prompting business leaders to seek out opportunities for their companies there—regardless of whether the goods and services they offer are primarily digital. Though many companies now have some experience engaging with the metaverse, signals for what will bring the technology into the mainstream are elusive. It may be, however, that the catalyst of that shift is hiding in plain sight: 5G.
The anxiety executives feel about their ability to adapt to emerging technologies like the metaverse was reflected in PwC’s recent Global CEO Survey: 39 percent of respondents say their company would no longer be viable in 10 years on its current trajectory.
Companies are eager to evolve, and a striking number see the metaverse as central to their transformation: 82 percent of CEOs expect it will be part of their business activities within three years.
But what does 5G have to do with the metaverse? At the most basic level, 5G’s increased speeds will bring the metaverse to many locations where current broadband speeds are simply too slow. 5G’s lower latency also means that the metaverse will be more responsive, creating a better user experience for virtual reality (VR) and augmented reality (AR). (These applications have suffered from a “lag” effect on older networks that can cause motion sickness and make it difficult to sync up seamlessly with real world environments.)
The metaverse thus presents a significant opportunity for telcos, which have invested huge amounts of capital in building the infrastructure necessary for 5G to function. To capitalize on it, telcos need to figure out how to monetize this new virtual ecosystem fairly. That means figuring out how to get metaverse users–from commercial brands to platforms to individuals–to pay for a reasonable share of the operation and maintenance of the real world broadband networks that make it all work.
How telcos can package and price their services to generate profit from 5G remains an open question. Consumers are likely to balk at steep increases in subscription costs from providers, but they also continue to expect more from them, namely faster internet speeds and lower latency. These circumstances require a rethinking of traditional telco business models, which tend to set prices based on minutes and megabytes. Rather, revenue models should value experiences and performance. They ought to also consider multi-party approaches that allocate some expenses for network upkeep to the applications and services that need 5G in order to reach end users.
It may help smooth the way for telcos to lay the groundwork for new prices and payment models by beginning to educate consumers and partners in the kinds of features their 5G “metaverse-capable networks” offer. In addition to faster speeds and lower latency, 5G comes with enhanced security, which will be essential to protecting metaverse user identities and currencies created through data stored in blockchains.
The metaverse is challenging companies of all kinds to reinvent the way they do business, and telcos are no exception. They have an advantage, however, in that they own the literal playing field. Now is the time to determine how to accurately value and quantify access to their 5G networks such that they can gain a fair return on their capital outlay and realize a profit. Having made 5G possible, telcos should position themselves — through careful planning and smart communication with stakeholders — to be first in line to reap the rewards that the metaverse ecosystem stands to generate.
