The Rise of Decentralized Wireless Movement (DeWi)
Technological advances in hardware and telecom infrastructure over the past few decades have created a hyperconnected world where 2.5 quintillion bytes of data are created every day. Thanks to mobile phones, today, 66% of the world uses the internet as opposed to 7% in 2000. As internet connectivity and access worldwide increase, the data created will only continue to grow.
Background on the Telecom Industry
Deploying wireless networks requires considerable capital expenditures and operational expenses. It resulted in a handful of companies controlling the pricing structure and conditions for the end user, effectively eliminating a free market. In the US, three companies — AT&T, Verizon, and T-Mobile — make up 98.9% of the wireless market. In Q2’22, these companies cumulatively generated $270 billion of annualised revenue.
The DeWi Movement
A new era of innovation has emerged that leverages token incentives for developing physical infrastructure networks in the real world. This category has been referred to as Proof of Physical Work (PoPW), Token Incentivized Physical Infrastructure Networks (TIPIN), or EdgeFi.
DeWi aims to revolutionise how communication networks are operated and owned by incentivising operators to deploy and maintain telecom hardware in exchange for token rewards. A more cost-effective method of bootstrapping a network is distributing the costs associated with building and maintaining a network to supply-side participants.
The DeWi Sector
With the success of Helium’s LoRaWAN network, today, more than 14 DeWi networks exist, including cellular, WiFi, LoRaWAN, Bluetooth, and hybrid networks.
1. 5G Networks (Cellular): The prominent players in this category are the Helium 5G and Pollen Mobile networks that leverage the recently deregulated CBRS spectrum. The cellular market opportunity is the largest compared to other network market sizes.
WiFi Networks: DeWi WiFi networks aim to create a globally shared WiFi network that anyone can connect to at a low cost. WayRu and WiFi Dabba are two early-stage projects building in this category.
2. LoRaWAN Networks (IoT): LoRaWAN (Long Range Wide Area Network) is a long-range, low-power wireless communication protocol. It is suitable for transmitting small packets — like sensor data — over long distances, making it the go-to network for IoT devices. Besides Helium, Foam and Chirp are building in this category.
3. Bluetooth Networks: Bluetooth Low Energy powered networks are suitable for low-power and low-range use cases. Nodle is a Bluetooth mesh network that leverages smartphones and Bluetooth Low Energy routers to connect IoT devices to the internet.
4. Hybrid Networks: Hybrid networks combine different wireless technologies into a single solution to provide decentralised internet connectivity. Althea and World Mobile Token are two examples of this.
The Future of DeWi Cellular Networks
There are three different ways DeWi cellular networks can position themselves: as a neutral host, cryptocarrier, and private network.
The neutral host model allows multiple mobile network operators (MNOs) to use DeWi network-owned infrastructure. This could entail data offload partnerships where MNOs roam onto DeWi cellular networks when a user is in an area without coverage from their carrier. Additionally, MNOs could pay to offload data when their networks are congested, avoiding service degradation. DeWi small cell networks will likely be used to densify traditional MNO’s macro networks.
The alternative to the neutral host model is the cryptocarrier route. Nova Labs defines a cryptocarrier as an innovative mobile carrier model that leverages people-built coverage and crypto-economics to reduce costs and increase benefits for subscribers. Last month, Nova Labs unveiled their cryptocarrier, Helium Mobile. Cryptocarriers are similar to a mobile virtual network operator or MVNO.
Nova Labs’ cryptocarrier combines Helium’s 5G network with T-Mobile’s network when Helium Mobile subscribers are in an area without DeWi coverage, the cryptocarrier switches to T-Mobile’s network.
The last option is a private network. Pollen Mobile began as an in-house connectivity solution for Pronto — an off-road autonomous vehicle technology company. Pronto’s vehicles needed reliable internet connectivity in remote locations, so the team built their private cellular network, leading to the spinout and formation of Pollen.
Final Thoughts
Although the DeWi sector is still nascent, its potential to revolutionize the telecom industry is evident. The rapidly increasing number of protocols trying to claim a share of the DeWi cellular market shows the significant opportunity ahead. Additionally, many former traditional telco executives are behind many of the newer DeWi projects, further strengthening DeWi’s legitimacy.
In line with recent developments, DeWi cellular networks will not replace traditional MNOs, but will likely coexist with them, at least in the short term.
Source: The Telecom Cowboys of the Decentralized Wireless Movement From (Messari)
