In 2020, LG Uplus made an interesting move by launching augmented reality (AR) glasses, a collaboration with Nreal, a leader in mixed-reality products from China, and the renowned chipmaker Qualcomm Inc. This initiative was aimed at enhancing their 5G offerings by entering the emerging wearable AR market. Around the same time, Deutsche Telekom also entered into a technology partnership with Nreal to develop mixed reality solutions for the wider market. However, the path to commercial success in the metaverse has proven challenging. Despite the innovative technology and partnerships, the adoption of AR and VR devices remains slow, and the metaverse has yet to achieve widespread popularity. This situation highlights the stark contrast between the anticipated impact of these technologies and their current market presence, underscoring the hurdles telecom companies face in finding viable business models within the metaverse landscape.
While telecom companies face challenges in harnessing the metaverse, platforms like Roblox are at the forefront of its development. With 55 million daily active players, Roblox stands out as the most popular metaverse game, attracting a diverse audience that engages in a variety of activities beyond gaming, including socializing and shopping. A significant portion of this virtual universe is populated by Generation Z, those born between 1997 and 2012, who are not only consumers but also creators within these digital spaces. This generation has grown up with the technology and is comfortable navigating and shaping their own experiences in these expansive virtual worlds, making them a key demographic in the evolving narrative of the metaverse.
Telecom companies are observing the success factors of platforms like Roblox and Minecraft and are beginning to integrate similar components, such as gaming and social media, into their offerings. In an effort to appeal to Generation Z, who are keen on creating and participating in virtual worlds, some telecom operators are exploring business models that incorporate NFTs (Non-Fungible Tokens) within their virtual environments, hoping to capitalize on this demographic’s enthusiasm for digital ownership and creativity. However, the transition poses significant challenges for telecoms, rooted in their traditional business structures. Accustomed to maintaining tight control over their technologies and user ecosystems, telecom companies naturally lean towards creating more centralized, walled-garden types of metaverse experiences. This approach may conflict with the inherently open and user-driven nature of successful metaverse platforms, making it a complex task for telecoms to adapt and truly transform in line with the dynamic demands of the digital world.
Several telecom companies are exploring the metaverse primarily as an innovative channel for promoting and selling their traditional products, such as smartphones. For instance, Vodafone has ventured into creating a metaverse retail store, while China Mobile has developed a virtual world accessible through its mobile client app. These initiatives, however, tend to limit the user base to the telecoms’ own subscribers, confining the experience within the boundaries of their existing services. Such approaches reflect a cautious step into the metaverse, leveraging it as an extension of current sales and marketing strategies rather than fully embracing the broader, more interactive possibilities that the metaverse offers beyond mere product promotion. This strategy might restrict the potential to attract a wider audience that is looking for a more expansive and engaging virtual experience, beyond just a digital storefront.
For telecoms venturing into the metaverse, enhancing accessibility should be a priority. Before introducing platforms that feature NFTs or other paid items, they need to ensure that these virtual spaces are easily accessible and appealing to a broad audience. Limiting access to their own subscribers may hinder the growth and diversity of their metaverse communities. To truly capitalize on the metaverse’s potential, telecoms must look beyond their existing customer base and create inclusive, engaging environments that attract a wide range of users, fostering a vibrant and dynamic virtual world that extends beyond the confines of traditional telecom services.