Will mobile operators jump on the metaverse bandwagon? , Digital platforms and services

Hardly a day goes by without another significant commitment to metaverse developments: the latest name in the frame is The Walt Disney Company, which, according to Reutershas appointed Mike White, current senior vice president of consumer experiences and platforms in Disney’s media and entertainment distribution unit, to lead its metaverse strategy as the entertainment giant adds to the plethora of renowned companies striving to create a whole new world in the digital realm.

White is slated to become the company’s senior vice president of next-gen storytelling and consumer experiences, working with Disney’s creative teams to define how consumers experience its metaverse. Such a move makes sense for a giant digital content producer like Disney, but is there such a strong case for telcos to allocate people, R&D funds and other resources to projects related to the metaverse?

Disney’s approach has been described on an earnings call in November 2021, when company CEO Bob Chapek unveiled plans to open a new chapter in its storytelling journey by connecting the physical and digital worlds “even more closely, enabling storytelling without borders in our own metaverse Disney”. He also noted that there was “unlimited potential” for the company in its next century.

The metaverse concept is already widespread in major Asia-Pacific markets. For example, China’s Global Television Network reported a metaverse industry committee in China added 17 corporate members, bringing the total to 112 overall. New additions would include Inly Media, Beijing Topnew Info&Tech and Beijing Quanshi World Online Network Information, among others.

In addition, the Metaverse Industry Committee of the China Mobile Communications Association was launched in October 2021 to evaluate the national industrial policy and development strategy of the metaverse in mobile communications. His members understand China Mobile and China Unicom, according to the Global Times, telecom operators are therefore getting in on the action in China.

Reuters cited figures from data technology services firm Tianyancha, which showed that more than 1,000 Chinese companies have filed applications for some 10,000 metaverse-related trademarks. These include digital platform giants Alibaba and Tencent.

And, of course, there’s Meta, the company still often called now (but probably not for long) Facebook.

The company, which transformed in October 2021, unveiled it spent around $10 billion in 2021 on its Reality Labs division, which is responsible for creating hardware, software and content related to augmented reality and virtual reality. And he plans to spend more in the next few years.

And just this week, Meta Founder and CEO Mark Zuckerberg provided an update on its Facebook page regarding the company’s values ​​and cultural operating system. Acting quickly, increasing “the speed of our highest priority initiatives by methodically removing obstacles that get in the way”, living in the future with the goal of “building the future of distributed work we want, where opportunities are not limited by geography” and naming staff “metamates” were among the highlighted focal points encouraged by the Meta boss.

With so many companies, whether from the world of social media, media/entertainment or even centralized/regional government, investing in metaverse developments, the question for mobile operators is…should we join them? ?

Early telecommunications entrants into the metaverse

Some have already done so, and it appears that the Asia-Pacific region is home to the activity of telecom players related to the metaverse.

The South Korean operator SK Telecom was among the pioneers in the realization of such a concept. It launched its Ifland digital platform in July 2021 and has already gained over one million monthly active users (MAUs). (See SK Telecom enjoys early success in the metaverse as it targets major sales growth.)

Local media, Yonhap News Agency, reported that SKT’s main domestic rival, KT Corp., is also actively exploring the digital realm. His moves would include establishment a “Metaverse One Team” in June 2021 with nine other participants, including mixed reality content company Dilussion, video technology provider WYSIWYG Studios and the Korean VR AR Industry Association.

More recently, the operator has been tip having landed a partnership with Shinhan Bank to develop 23 projects related to artificial intelligence (AI), metaverse, non-fungible tokens (NFT) and others.

Meanwhile, in Japan, NTT DOCOMO vaunted “metaverse features” by developing avatars in a 3D virtual environment, reflecting the movements and expressions of users located in the real world, the Japan Broadcasting Corporation reported last month.

Asian operators are not the only ones willing to invest time and money in this business. The American operator AT&T has launched its own VR world called AT&T station in October 2021. He described the platform as “a groundbreaking experience spanning games, wearables, and culture” in partnership with gaming and lifestyle organization 100 Thieves. And, in just a few days, it will allow users to enter the Metaverse during the 2022 NBA All-Star Game on February 20. Boosted by its AT&T Playmaker, fans can receive a 3D body scan to customize “their own unique avatar, then place themselves in one of five personalized All-Star-themed AR playgrounds, such as Space Soaking or flex the last courtside fit” the operator explained.

Will operators around the world join the metaverse club? And if so, is it wise to do so?

Despite SK Telecom’s early success and ongoing efforts by other carriers around the world, these telecom carriers seem to be the exception rather than the rule, and there may be a good reason for that: some analysts in the industry are skeptical of telecommunications opportunities in the metaverse.

Phil Kendall, director of the service provider group at Strategy Analytics, explained that the South Korean market is unique because it has had “less exposure to ‘Western’ media giants and hyperscalers, so SKT and its rivals have been able to build stronger businesses in areas where your average European operator would struggle to generate scale.

For example, he noted, European carriers typically turn to media companies to create engaging content to showcase 5G services, while those in South Korea have themselves found cost-effective ways to do so. To do. “The same applies to the development of services in the IoT [Internet of Things] market, where South Korean operators have a much more active innovation role and have been able to play in a larger part of the value chain.

China and Japan are similar markets to South Korea in this area, according to the analyst.

“These are three markets where mobile operators have been successful in positioning their brands as much broader consumer brands – operators in these markets have been successful in a number of ‘adjacent’ areas ranging from instant messaging to e-commerce and from mobile financial services to music and video streaming to IoT applications,” Kendall said.

And US operators, he noted, have more scale, but their challenge is that they operate domestically for big OTT (over-the-top) and hyperscaler brands. “I don’t think the acquisition of media assets by Verizon and AT&T indicates that carrier scale is working for them,” he argued.

Kendall believes most carriers will collaborate with players developing AR, VR, metaverse devices and platforms rather than independently or collaboratively attempting to create their own metaverse, “the same way they partner to Netflix, Disney+, Google Stadia, Apple Arcade et al to raise their profile,” the analyst notes.

He added that this strategy is partly about creating bundles that meet the needs of target segments and providing services to drive network traffic, thereby forcing customers to migrate to faster networks and larger data plans. and more expensive.

“I think a lot of operators have gotten burned trying to be content providers or compete head-on with OTT services. They lack a social media presence and haven’t achieved much in terms of evolving messaging beyond SMS”, RCS (rich communication services) being a prime example of where the collaboration of operators doesn’t always guarantee success, Kendall explained.

The lack of a standardized metaverse approach for the telecommunications industry is another point to consider. “Some operators are collaborating within the Global XR Content Telco Alliance, mostly in areas like content sharing or production expertise, but it’s more about seeding the market with content that connects to various XR. [extended reality] platforms rather than building a universal platform,” Kendall noted.

ABI Research senior analyst Michael Inouye noted that it would be difficult for mobile operators to compete with the big tech players in the metaverse market. While SK Telecom, for example, has already exceeded 1 million MAUs for its Ifland metaverse platform, that figure still lags behind big names like Facebook, which has nearly 3.8 billion MAUs for its platform. form of social media, he noted.

Another issue, Inouye said, is the longevity of content services. He noted that telecom operators have often adopted services, supported them for a time, but then abandoned them when they fail to meet expectations or meet targets, but this approach is not suitable for the metaverse model.

“It’s really about whether they’re going to sustain the service long term,” which the analyst described as a key difference in customer trust versus social media, which people still use and support.

While people may accept a discontinued video service, it’s different when you invest in a social platform that engages people. If operators were to offer an immersive digital service experience and then abandon it, it would be very risky in terms of customer experience and social aspects, Inouye explained.

He doesn’t think telcos can reach the scale of companies like Facebook because their investments have to be primarily elsewhere. The metaverse is more likely to benefit telcos by driving additional traffic to their networks and allowing them to market 5G connectivity services focused on latency and high bandwidth metrics.

Inouye also pointed to a challenge when it comes to ensuring consumer trust in how their data is used for advertising (and therefore monetization) purposes in the metaverse.

As we all know, privacy is an ongoing issue for big tech players like Facebook, and we’re going to explore how it plays out in the real world and the metaverse.

– Yanitsa Boyadzhieva, Deputy Editor-in-Chief, TelecomTV