The metaverse promises to provide the next iteration of the internet. Its underlying technologies like VR, AR and blockchain are mature, and governance is progressing. And with the metaverse dependent on networks, telcos will have a significant role to play.
The metaverse has quickly gone from a buzzword to a part of the new digital conversation for enterprises. In enterprise terms, it promises to be a world of four Cs: connectivity, communication, collaboration, and customer experience (CX).
According to Bloomberg Intelligence, the market for the metaverse could be worth as much as $800 billion by 2024. JP Morgan has called the metaverse a “trillion-dollar yearly revenue opportunity”, noting that around $54 billion in virtual goods are sold yearly, more than twice the amount spent annually on buying music. Gartner estimates that by 2026, 25% of end-users will spend at least one hour a day in the metaverse, for work, shopping, education, social activities or entertainment. The metaverse is increasingly looking like an idea whose time has arrived.
The technologies that people will use in the metaverse are growing in maturity. For example, IDC predicts that the VR/AR market will be worth $36 billion by 2025, at a CAGR of 68.4%. This is fast growth for a technology that initially struggled to gain traction, but the promise of a fluid and truly immersive 3D experience is driving adoption.
There will be many metaverses, and all will require cloud and edge computing to meet the demands for massive and decentralized storage and compute. Cloud will be where the metaverse resides, edge computing will move infrastructure closer to the end-user. Shifting compute, storage, and data processing functions to the edge improves network response times and reduces bandwidth.
Bandwidth is a big factor in metaverse QoS. Networks will have to be high-bandwidth and low latency, requiring fiber, 5G and network slicing.
Blockchain and other tokens like NFTs will be central to managing identity, ownership and payments in the metaverse. Technologies that have been finding their feet in the past couple of years, or perhaps waiting for their “killer app”, may have found it.
There are several challenges to overcome for the metaverse to become truly mainstream. Consumers are interested, but concerns remain: recent research found that 80% of consumers “see promise” in the metaverse, but 37% are worried about security and identity, and 21% feel that their internet connection isn’t up to the job.
There’s enough belief that the metaverse will be a major trend though, as evidenced by the EU announcing a new initiative on the metaverse next year, which will ensure specific principles are met.
One of the biggest challenges to the metaverse’s success is too many metaverses. It raises the massive issue of interoperability.
As things stand, Facebook, or Meta, has announced its multiverse plans. Microsoft has its own version called Mesh. Apple hasn’t yet announced its own version but has put much R&D spend into an AR/VR headset.
Various industry experts are skeptical that there will ever be such a thing as a single metaverse, which makes interoperability of equipment and metaverses essential. Interoperability would allow users to move seamlessly from one metaverse to another, using the same avatar, attributes and virtual possessions.
Several organizations have already set up workgroups to define the standards and regulations required to make the future of the metaverse viable. Interoperability is a key part of that, as are users’ security and fair competition. One such initiative is the Metaverse Standards Forum, which launched in June 2022, with a remit to work towards Metaverse interoperability. Similarly, the EU launched the Virtual and Augmented Reality Industrial Coalition in September 2022, a platform for structured dialogue between the European VR/AR ecosystem and policymakers.
These moves come on the back of other workgroups that laid the groundwork for metaverse standards, or standards for its components.
3GPP launched a study into the 5G service requirements for metaverse services, and the W3C, an international community to develop Web standards, also introduced a “metaverse interoperability community group” with a mission to bridge virtual worlds by designing and promoting protocols for identity, social graphs, inventory, and more.
ETSI has set up a group to work on the "augmented reality framework” around interoperability of AR components, systems and services, while the Open Metaverse Foundation, is also working on an open-source platform that allows different virtual worlds to interoperate with each other.
Interoperability will be essential if the metaverse is to be the world-changing tech trend that has been pitched. If users are unable to communicate and interact with users on another platform, and share data and content, then it limits the experience for end-users and enterprises alike.
Telcos are currently experimenting with what they might get from the metaverse themselves. There are external and internal possibilities: one of the clearest examples is to use the metaverse as a new commercial channel as part of a multichannel strategy. Many brands already do this, offering virtual versions of existing products or creating exclusively virtual collections that can be reproduced in the physical world.
Companies are already buying real estate in the metaverse. Brands like Nike and Adidas have purchased pieces of land in Roblox and the Sandbox, for example, in which they will provide virtual retail operations and showcase products and services.
The metaverse could be useful for product conception and operations, similar to digital twins. Digital Twins have been used in assorted industries for several years, with examples like AB InBev, the world’s largest brewer, creating a digital twin of its entire supply chain, or Airbus designing and maintaining its aircraft in a virtual model.
The industrial metaverse could be a perfect marriage of digital twins with human interaction. A good example is BMW using Nvidia’s omniverse to create a digital twin of a factory floor, test it in real-life production situations, and improve it.
Plus, at a basic level, the metaverse offers a place where events can be held, where geographically dispersed customers, partners, or journalists, for example, can be hosted.
Orange France recently announced the launch of its latest set-top box in the metaverse, while Orange Spain and Luxembourg have opened retail stores in the metaverse. Orange Luxembourg has also opened an Orange Digital Center, a support center for digital skills.
Geographically dispersed people work within companies too, so the metaverse could be useful for facilitating more immersive, “hands-on” training courses for staff or, at a simpler level, company-wide meetings. There is a knock-on benefit regarding the opportunity to cut back on business travel.
It all potentially means more for the network to do, of course. According to Credit Suisse, even modest metaverse usage could cause current data consumption to increase 20-fold by 2032.
Network speed and latency must improve drastically for users to have a good experience. Some metaverse specialists have estimated that to support 2D metaverse experience in 4K resolution (60 frames per second), the minimum speed should be 400Mbps. Interactive experiences in 3D with even higher resolutions and frame rates could require a minimum of 2Gbps. And latency will need to be as low as 10-20 milliseconds, according to Dan Rampton, director of engineering for Meta, considerably lower than the latency currently required for cloud and video services (approx. 150 milliseconds). Thus, communications infrastructure investment will be essential to metaverse success.
Telcos have an opportunity: they are ideally placed to provide the combination of fast, resilient and secure connectivity services that can enable the metaverse. 5G (and later 6G) networks with slicing and edge computing will make up the mix. However, it won’t come cheap, which is prompting several operators and even Thierry Breton, the European Commissioner for the internal market, to advocate the “senders-pay” principle. This will help ensure that all market players profiting from digital transformation contribute fairly to the initial costs.
It is an exciting time for telcos, and they can, as connectivity providers, play a major role in the development of the metaverse. But they must get involved in defining the metaverse’s scope, standards and rules to reap the benefits.
