A few years back the economists Carmen Reinhart and Kenneth Rogoff published a wonderful economics tome called This Time is Different, about eight centuries of financial folly. Their engaging idea is that everyone always says that their financial crisis or major new trend is really different this time, but it never is. Their message is that history is forever doomed to endlessly repeat itself. These words sprung to my mind when recently writing an article for a UK financial publication on the rise – or should we say, the return of – the metaverse.

Facebook’s name change produced a collective shudder amongst investment cynics like myself who’ve also moonlighted as tech nerds. I’m old enough to remember all the failed attempts at augmented reality (AR), virtual reality (VR) and everything in between. Obviously, this time it really is different because Facebook says it is and it is pumping countless tens of billions into research to prove the point.

But the smart money knows that in many ways the meta verse is already here, it’s just that the current day experts realise that if they shout too loudly they’ll be accused of hubris. Take the endless number of virtual gaming worlds already sucking up teenagers’ attention. Or the growing B2B AR and VR implementations used by businesses built around frameworks such as Microsoft’s HoloLens. Or the fast-emerging Digital twins metaverse at the enterprise level which takes the Internet of Things (IoT) and then jams it into top gear by allowing engineers to remotely test system stresses and capabilities.

Another clue that maybe it really is different this time is that investors are taking note. Giant US investment bank Morgan Stanley has just released a spate of reports. ‘The Next Big Theme – Metaverse’ by Edward Stanley is one summing up the tone nicely – which highlight in detail why it might be different this time. That report certainly finds an echo with investment managers. I recently interviewed one of the UK’s leading technology fund managers, Ben Rogoff at Polar Capital, and he couldn’t stop him talking about the metaverse. I’ve even waxed lyrically – and cynically – on the investment case HERE.

My own central case is that it’s not really a case of this time it’s different, it’s just that existing technologies and infrastructure are finally catching up with marketeers’ exaggerated demands. Virtual worlds sounded fun initially but try getting excited about all this interaction via ADSL telephone modems. Or clunky AR glasses. Again, it sounded cool when Google brought out ‘those’ glasses but frankly the technology – and content and means of delivering the content – wasn’t quite there. In sum we’d seen the future already, but the present wasn’t a patch on the promise.

Now that promise is being delivered and the infrastructure implications are seismic, I think. But before we think through those implications let’s first get the definitional boring stuff out of the way. According to Morgan Stanley, the metaverse in a nutshell is: ‘A virtual world for immersive experiences that is persistently available and where users can explore vast numbers of experiences concurrently. Within these experiences, people across the world can meet, play, watch, trade and learn across millions of experiences.’ Or as Bart Schouw of Software AG nicely sums it up in a recent Information Age article: the metaverse mainly “refers to a convergence of physical, augmented, and virtual reality in a shared online space – or the universe of data.”

As I said there’s plenty of products already out there that are making use of these overlapping technologies. For instance, many Snowball customers today run edge-based processing with drones and then map it into 3D point clouds as they collect the drone information.

Kick the tyres and you begin to realise that in fact metaverse isn’t really a ‘product’ or ‘single technology’ as such but its own infrastructure. You can already see this new infrastructure at work via outfits such as Subspace which is helping gaming businesses reach bigger audiences by building a “parallel internet that puts high-traffic applications on their own network, ensuring the fastest and most stable path for instant experiences”. In this alternative narrative, the metaverse isn’t an application but “the next iteration of the internet that supports real-time experiences.” Or perhaps more succinctly Network as a Service model with outfits such as Subspace offering up a huge global private network for near real time applications.

OK but back in the world of hard infrastructure reality, we have to accept some real challenges, not least the obvious “interface challenges”, a wonderfully euphemistic way of saying that no one over the age of 30 is going to wear a stupid VR headset.

But there are other less obvious challenges. One school of thought reckons that for the metaverse to be really game-changing, it needs to be connected to countless tens of billions of devices via the IoT. As Bart Schouw puts it “The only way to do that will be by mass ingestion of the data coming from the Internet of Things. Only with this data will you be able to create a rich and meaningful environment. The next need after “seeing” will be “interacting,” meaning that the data not only needs to be represented in a meaningful way but also must be responsive.”

Which bring us nicely to the $64 trillion question: Latency or responsiveness needs to be absolutely minimised in order to simulate real world response times. And here we get to the infrastructure challenge. If this slightly dry subject interests you, I recommend reading a fascinating discussion between Bill Vass, VP of Engineering at Amazon Web Services, Patrick Cozzi of Cesium and Marc Petit of Epic Games. They discuss the Cloud Infrastructure for the Metaverse HERE.

To make the metaverse sing and dance, operators somehow need to find a way to overcome the big challenge: that the bridge of the network is going to cause problems. If I’m sitting at home constantly tapping away for a response and the latency starts cruising above 100 ms, then I’m off making a cup of coffee. Figuring out the solution requires a triad of solutions. Main core functions sitting in the cloud, helped along by edge services and networks all connecting to smarter devices in your pocket. As Voss says, if customers have “a really powerful thing, like an iPhone, they can run a lot there, or a car, they can run a lot there. If it’s less powerful, and they have good network, they’ll offload more and more to those tiers.”

For this lay observer, that suggests the following. The first is that to make the metaverse really work someone who is trusted to make smart handheld devices needs to run with the metaverse ball. Cue Apple. If anyone can make a device with the processing power of an old supercomputer sit on your nose, the boys and girls at Cupertino can.

BUT, and yes this is a big infrastructure BUT, that device needs to link into both services and a base layer of infrastructure that makes said Apple device work with next to no latency. And in this, I see an impending battle. We’ve already seen the likes of Google and Facebook migrate down the value chain into owning bits of digital infrastructure such as data centres and sub sea cables. But if they want to dominate the metaverse – and not leave it to Apple – they have to offer a seamless service with next to no latency into the last mile. They cannot be reliant on some backwoods telecom operator to send that final bit of data over ancient wires and cables. Or to put it bluntly I cannot see how Facebook and presumably Google can make the metaverse work unless they own the last mile into the customer, i.e the whole digital infrastructure chain.

But as they head downstream into your homes, they might run into mobile operators heading the other way, upstream. Back to Bill Vass from Amazon – “So everything you get on the cloud, you get in this (5G) hub much closer to the customer from a latency perspective. Solves the speed of light problem to a certain extent”. Already we’re seeing products emerge such as Wavelength which push the cloud to the 5G hubs, with very low latency that is ideal for metaverse applications.

Which brings me very nicely back to that Morgan Stanley report I mentioned at the beginning. If Facebook and Google start playing in the telco space, why can’t the telcos play in the cloud/content/metaverse space? This might upend the traditional model which is based around the idea of ‘Build it and they will come’.

Perhaps the better model is to build both simultaneously, i.e products and infrastructure. And telcos already know this model works. According to the Morgan Stanley Metaverse report “Vodafone saw reasonably significant volume spikes at the time of the Pokémon Go phenomenon in 2016. Vodafone noted that AR/VR is ‘sticky’ (seven out of 10 people that use Pokémon Go return to use the application the following day), while also stating that AR/VR triggers considerable other mobile usage (Facebook, YouTube, tweets, etc.) as well as fixed usage.”

So, here’s my slightly ambitious reading of one distinct possibility. Whilst most digital infrastructure investors wax lyrically about say Autonomous Cars or Smart Factories as the killer apps for 5G, what about thinking of AR/VR as “the medium-term killer 5G app” (Source: Vodafone CTO, Technology Day, Q32021)? In other words, the launch of stand-alone 5G networks in 2023 could drive a wave of AR/VR innovation and the mobile telcos could be in the lead pushing new products and services as part of an expanded metaverse. If you already provide infrastructure via a network, why not take Facebook at their word and play them at their own game? This way the telcos can square the circle of mobile volumes continuing to rise by ca +30-40% YoY whilst being constantly undercut by per unit deflation (price per Gb). For the telcos, the metaverse could be the solution to their revenue growth rate challenge. The challenge then becomes how to move faster than Facebook or, should we say, Meta!