Telecoms firms see ‘metaverse’ as killer 5G app to help recoup billions spent building next-gen networks

Telecoms companies in China, the US and South Korea see augmented reality and digital worlds as the key to making back money spent on superfast 5G networks

The ‘metaverse’ concept has inspired companies like Roblox, but there is no guarantee it will become the big revenue driver that telcos hope

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Staff demonstrate a VR cycling system during a media tour of SmarTone 5G Lab at Sky 100 at the International Commerce Centre in Hong Kong on May 1. Telecoms companies are betting on virtual and augmented reality to help recoup the costs of building 5G networks. Photo: SCMP/Sam Tsang

Published: 10:30am, 11 Aug 2021Updated: 8:36pm, 4 Oct 2021

About a decade ago, mobile carriers poured billions of dollars into high-speed 4G networks only to see technology giants such as Apple, Facebook and Google walk away with most of the profits fuelled by social media. As operators plough even more cash into 5G, they are betting on a futuristic concept in hope of a fair share of the returns this time.

Telecommunications companies are looking to build a platform based on the metaverse, an idea that inspired Ready Player One and online games by market darlings such as Roblox Corp. Early-stage examples include virtual and augmented reality headsets or glasses that provide immersive experiences. Advanced versions – still years away pending superfast wireless data speeds – combine multiple technologies like holograms to bring the internet to life: 3D avatars of people working, interacting and relaxing in digital replicas of offices, factories and leisure venues.

Recognising the business potential, telecoms companies ranging from China Mobile to Verizon Communications and SK Telecom are jumping into the fray – alongside online-game developers – to build a “killer app” that could resemble a blend of today’s social media and e-commerce, but on steroids. Operators could earn a third more in revenue, potentially reaching US$712 billion by 2030, if they introduce such innovative 5G applications on top of just laying pipes, according to a research by Ericsson’s research arm Consumer & IndustryLab.

“If you do nothing, you will stay on a flat curve revenue wise,” said Stockholm-based Pernilla Jonsson, head of Consumer & IndustryLab. “We see the potential. It will be very interesting to see how this plays out. Who will actually be the winners of the metaverse is still a very open question.”

Jonsson expects the development of the metaverse to be gradual, starting with those headsets and glasses piggybacking on smartphone connections. Cutting-edge metaverse applications are still at the conceptual stage. If they do become reality, virtual meetings and shopping online would feel like real-life activities, with digital copies of almost everything that also reflect real world changes in real time through advanced 3D image capturing.

China Mobile, the world’s No 1 carrier by subscribers, Verizon, the largest US operator and South Korean leader SK Telecom are among those building platforms based on virtual or mixed reality, a term that means blending the digital world with real-life environments.

While most current metaverse platforms are online video games, “what 5G is going to do is really turn that metaverse experience into something that reaches out into your daily life”, Sarah Gilarsky, a business development lead for Verizon’s next-generation entertainment partnerships, said at a February panel discussion by the company’s research arm.

SK Telecom wants to create a virtual economy based on its platform, said Cho Ik-hwan, SK Telecom’s vice-president and head of mixed reality development, where people not only seek leisure and entertainment, but also trade and develop businesses.