Telecom Operator Strategies for Enterprise Applications in the Metaverse

Stemming from the Greek words, metaverse (which in English means as much as after or beyond) describes a sphere that goes beyond reality and can portray virtual content in a realistic environment, that allows consumers to venture freely in a virtual world (beyond reality). As this is becoming increasingly interesting for consumers a range of actors increase their efforts towards this domain, including hyperscalers and telecom Communication Service Providers (CSPs).

In this context, SK Telecom has been announcing early results of their metaverse platform, Ifland, as it reported significant uptake in user engagement only six months after platform launch. The platform in its early stages the platform concentrates on providing a platform for “social virtual reality” and meetup space for leisure, with potential to venture into more enterprise-oriented use-cases. While the platform reported 280,000 monthly active users during its first month in operation, this grew to more than 1.1. million monthly active users (MAU) by the end of 2021. Looking at business-to-business (B2B) opportunities, the South Korean operator reports more than 1,500 requests for partnerships.

As these numbers underline, there is great interest for virtual platforms within both consumer and enterprise worlds. Therefore, now is the right time to look at how CSPs can play a role in these applications and what strategy they should pursue.

But the metaverse can be much more than just an extension to the somewhat over-hyped computer game “second life”. The online multimedia platform gained momentum in the early 2010s as it allows people to create an avatar for themselves and have a second life in an online virtual world. Apart from more consumer-centric enterprise use cases like improving customer services, the metaverse also provides promising opportunities for enterprise verticals.

Firstly, it provides the opportunity to combine existing Augmented Reality (AR)/Virtual Reality (VR) use cases with an interaction element to create a realistic co-working experience. Airplane manufacturer Boeing, for example, intends to use Microsoft Hololens and 3D digital avatars to strengthen aircraft engineering and prevent manufacturing flaws. In a similar fashion, competitor Airbus also partnered with Microsoft to use Azure Mixed Reality and Hololens for similar use cases. The metaverse can extend these use cases to provide a collaborative element. A team of colleagues can collectively perform actions on a digital twin or can assess simulation results and alter parameters together. Enterprises can furthermore use the metaverse to help them understand consequences and potential impact of their decision by simulating different scenarios and therefore plan for different contingencies.

From a technology perspective, this carries several important implications. Firstly, distributed computing is becoming even more important as the transmission of virtual and augmented reality video requires the transmission of particularly data-intensive files between network and particularly devices. Therefore, any underlying connectivity technology must adhere to stringent requirements as it must support particularly high bandwidths.

Secondly, as the metaverse opens opportunities for more sophisticated enterprise applications, it also results in a more complex application design processes, as software distributing and processing payloads will become more complex. This in turn will raise the question of where these metaverse applications will reside within the network, as this will alter the carrier opportunity in this context quite considerably. Should applications run in the telecom edge, carriers would have a considerable opportunity for new payloads. The role of the telecom edge in this context, however, will once again depend on the respective enterprise vertical. Uncarpeted verticals (like manufacturing, energy generation, healthcare, or logistics, for example) will aim to run applications in their dedicated infrastructure (either enterprise-owned or provided by hyperscalers) because of their interest in data integrity and use-case criticality, deployments in the traditional “carpeted verticals” (like retail, hospitality, stadiums and smart venues) will be more open to outsourcing their applications into the telecom edge, as they will be unlikely to acquire the necessary processing infrastructure on their own for cost and performance reasons.

As distributed computing is becoming more important, telecoms need to gain a solid understanding of different enterprise use cases and the payloads involved to be able to determine how these payloads can sensitively be distributed between different physical units. In addition, it highlights the importance of a strong partnership network. Telecom operators should be prepared to offer their network (and more important network management expertise) as a platform for hyperscalers and specialized software developers, who will subsequently then develop enterprise grade applications.

The role of telecoms will depend on where processing of metaverse application data will take place. If metaverse applications will be residing in the telecom edge, this will be considerable opportunity for CSPs, which they should prepare for now while enterprise applications are being shaped. Following from the discussion in the previous section, therefore, the metaverse opportunity within the carpeted verticals (i.e., retail, hospitality, or media and entertainment) is much more tangible for carriers than in non-carpeted verticals (e.g., manufacturing, logistics or oil and gas), that would prefer running metaverse applications within their own networking infrastructure.

In addition, telecoms need to carefully assess how metaverse platforms will be provided to prepare their business strategy. Crucially, this needs to consider the most probable shape of the supply chain for enterprise verticals to understand who the most likely supplier of metaverse platforms to enterprise verticals will be, in order to assess their realistic position within that value chain and wage partnership opportunities against mergers and acquisitions. As enterprises will be looking hyperscalers or System Integrators to introduce new technology, CSPs acquiring software development companies, would therefore only yield limited commercial success in the enterprise world. Much rather, CSPs should position 5G as a key enabler for enterprise metaverse applications. As such, CSPs should extend their partnership network to be able to supply connectivity and network management capabilities into a full enterprise-grade metaverse platform, which will most likely be provided hyperscalers and/or System Integrators.