Would the metaverse be good for operators? That question was touched on in a Light Reading piece on MWC, which pointed out (correctly) that the show was surprisingly short on “mobile” news. It was bigger, at least, on metaverse, which prompted the author to comment “Nobody could explain why the metaverse is a good thing for operators, though. If it happens (debatable), it could throw up a tidal wave of data that soon overwhelms today’s networks.”
Let’s forget the assessment that the metaverse is debatable and focus on the two other points. First, that nobody could explain why the metaverse would be good for operators, and second that it might create a tidal wave of data that would overwhelm networks. I think that the two points are related, meaning that there’s an underlying presumption on which both are based. That presumption is that the only network impact of the metaverse would be to increase traffic, and that’s one of those “both-true-and-false” points.
The “true” side is that it would indeed be likely that the metaverse would increase user appetite for bandwidth. It would surely take less network bandwidth to make a social media comment than to have two avatars successfully shake hands. But this is a modest truth.
One reason is that operators are trying to convince users that they need higher broadband capacity. A hundred meg? Peanuts. A gig? Table stakes; if you want street creds you need at least two. Why? 8K video wouldn’t consume anything like that, and there are precious few 8K sources out there. Online gaming is probably very similar to the metaverse in terms of bandwidth appetite, and operators aren’t collapsing on that, nor are they trying to convince users to hold back on network upgrades.
Another reason is that until we know how the tasks associated with creating a metaverse and projecting it to users are broken down and distributed, we can’t hope to know what traffic would be associated with the process. Even the nature of the metaverse is still open. Is it going to be a fully realistic artificial reality, like a good online game, or is it going to be something more like human-synchronized Pac-Man that mimics our movements as we “run” through a maze? Where will the structure of what I called in previous blogs a “locale” be hosted, and where will visualizations based on that structure be derived? You get the picture.
The final reason is that even with our limited knowledge of the architecture of a metaverse application, it’s pretty clear that access bandwidth is the least of the technical issues to consider. Even, the least of the network issues, which means that the impact on capacity as we know it (which is from looking into the user side of the access connection) is actually a minimal concern.
What, then, is the issue, positive or negative or even null, for operators? The answer is “super-disintermediation”.
I do not believe that the metaverse will drive new investment or competitors in broadband access. That’s an area of the network where nobody other than a regulated monopoly or utility is going to venture. What it would almost certainly do is promote the dispersal of cloud hosting closer to the edge, primarily in major metro areas (there are between 50 and 100 such areas in the US and about five times that number worldwide). This investment is developing “edge computing” resources within which elements of a metaverse could be hosted.
Right now, network operators have a major financial advantage in this early deployment of the edge. First, they have the 5G hosting application that could justify the early spending, when metaversing hasn’t developed and can’t fund things. Second, they have real estate in the right places. Third, they have a low internal rate of return, which means that they can invest in projects with low ROIs and still sustain their overall financial health. These are major benefits, but while they would facilitate operator entry, they don’t guarantee it, and even players without these benefits could be induced to enter the space if the operators don’t make a move.
The metaverse, in the perception of the public, is a social-media concept. Facebook, facing market saturation and revenue stagnation in traditional social media, rebranded itself to “Meta”, proof that they believe strongly that the metaverse is the next level of social media. If Meta makes a strong bet on the metaverse (how could they not?) then we should expect to see supporting technologies boosted quickly. One such technology is edge hosting. Could Meta establish data centers in 50 or 100 cities in the US? Could their business induce public cloud providers to do that (they’re at least half-way there already)?
Network operators have known about the “carrier cloud” opportunity for at least a decade, maybe two. They’ve not been willing to capitalize it because of the combination of a high “first cost” and the fact that carrier cloud takes them into a new service area, one which they’ve been reluctant to target. The fact that many operators are looking to the public cloud providers for 5G hosting strongly suggests that they’re not going to move on the edge on their own, and that could disqualify them from the edge computing opportunity, which is bad.
What’s worse is the collateral risk of losing the “metro mesh” opportunity. If the metaverse expands/evolves into a community that’s very geographically diverse, many of the virtual places where people interact will draw from areas outside a single metro. To preserve a realistic experience, those distant people will have to be connected with fairly low latency, and that means that there’s an opportunity to create an optical mesh that would connect metro edge sites. Once deployed, that could also carry other traffic, and that’s the big risk.
Would large-footprint, low-latency, IP connectivity be a revenue generator? It would surely tap into the revenue of metaverse providers like Meta itself. It would also likely support IoT applications. But the big benefit to operators is that if they developed this themselves, others would be unlikely to do that because of the cost and ROI. That would keep public cloud providers, Meta, and others from getting into the WAN business, and that’s surely something operators should fear greatly.
There’s no risk of a tidal wave of metaverse data overwhelming networks. There’s a big risk of a metaverse network (built by a cloud provider or even Meta) overwhelming traditional IP networks and services. That’s what operators need to be thinking about right now.