• Will telcos consider decentralised physical infrastructure networks (DePIN) to help cut costs whilst expanding connectivity?
• It’s a blockchain-like approach to communications networking 
• DePINs could help with network growth and resilience
• But the approach is experimental and unproven

The notion of creating some sort of an equivalent to blockchain for the global telecom industry is far from new but, despite the idea fuelling the hype generator every few years, it hasn’t taken off in practice. That, though, might be about to change. 

Telcos the world over face huge infrastructure costs as they seek to transform themselves into future-proof digital services providers (DSPs). Ever-increasing numbers of subscribers now routinely expect and demand robust, resilient, ever-expanding connectivity and constant seamless access to super-fast broadband services and apps. That is putting great strain on network resources as the costs of providing enhanced connectivity continually increase. One solution to that problem might be for telcos to adapt their growth and network management strategies and use the complementary technology of decentralised physical infrastructure networks (DePINs).

Carlos Lei, the CEO and founder of Uplink, a startup company based in Portugal and focused on transforming connectivity via decentralised Web3 architecture, explored the potential of DePINs in this blog, published by Cryptonews, in which he covers the pros and cons of the DePin approach – and there are several of both. 

Enthusiasts for the third iteration of the internet, Web 3.0 (we currently live in the era of Web 2.0) say it will be more decentralised and, as a result, organisations will control data or apps while users will have far greater control over their data and its privacy. 

It is claimed that Web 3.0 will interpret content by using semantic technologies whereby computers will be able to understand information in ways similar to those of human beings. 

This will be effected by AI, by making data machine-readable and also by natural language processing. As a result, applications and search results will be more intelligent and capable of comprehending a user’s needs. Web 3.0 will be massively networked with users able to access data, services and apps on any device, anytime, and from anywhere. Furthermore, content creation platforms will be built using open-source technologies, to guarantee accessibility and transparency. 

Underpinning it all is the idea (or ideal) that everyone will abide by Zero Trust principles, whereby users and devices are not to be trusted by default, even if they are connected to a privileged network, such as a corporate LAN, and even if they were previously verified. In a trustless environment, protection will reach the network edge, meaning that, in theory at least, users, devices and services will be able to interact without requiring permission from a single authority. It sounds utopian but Web 3.0 remains a work in progress. There is no global definition of what it might or will be and no agreement on precise features and functionality, with regulation, scalability and interoperability just the tip of the enormous iceberg waiting to hole the entire concept below the waterline. 

DePINs have potential but are not ‘one-size-fits-all’ solutions.

However, something needs to happen to encourage telco network growth where it is most needed. Telcos are haemorrhaging both capital expenditure (capex) and operating expenditure (opex) even as they endeavour to deploy new technologies. As an alternative approach, DePIN permits organisations, ‘non-traditional’ organisations, entities, enterprises and even individuals directly to contribute to the provision of connectivity and thus enable DePIN networks to expand organically and flexibly without, in theory, the need for huge addressing upfront investments.

And let’s not forget AI, the elephant in the room that is having a profound impact on how networks are built and managed. As Carlos Lei explains, “While DePIN decentralises infrastructure deployment, AI is transforming how networks optimise traffic, improve efficiency, and scale to meet rising demand. AI-driven applications are pushing network infrastructure to its limits, demanding ultra-low latency, high bandwidth and distributed processing. Traditional networks weren’t built for this surge, driving massive investments in hardware optimised for artificial intelligence. AI-ready datacentre switches alone are projected to grow from $127.2m in 2024 to $1bn by 2027.”

He adds, “It’s clear that connectivity is evolving with AI as 5G-Advanced embeds automation to optimise traffic and efficiency. Looking ahead, 6G is expected to be AI native, enhancing performance and enabling real-time applications… Artificial intelligence is also shaping telecom trends. DePIN can play a crucial role in this shift by expanding coverage where telcos fall short.” 

DePIN can help enable smart cities to become smarter and quicker while also expanding the deployment of digital services to underserved regions and enabling  networks to scale rapidly in response to changes in demand.

That said, and as the blog makes clear, “Despite its potential, DePIN isn’t a one-size-fits-all solution. Telecoms operates in a highly regulated environment, covering everything from spectrum allocation to consumer protection laws. Integrating DePIN into existing frameworks would require careful co-ordination with policymakers to ensure compliance while maintaining the benefits of decentralisation. What’s more, DePIN relies totally on a distributed network of independent nodes that absolutely must routinely, consistently and robustly deliver the same (or even better) levels of performance and quality of service provided by the telco community that has already invested massive sums of money in their networks over many years and continue to do so. Some might be creaking at the seams but they do work.

Decentralisation evangelists, including Lei, stress that while DePIN might, at first sight, seem to be a revolutionary movement to replace traditional telecoms networks (which, of course, it never will), it is actually an evolutionary and complementary movement whereby collaboration and strategic partnerships result in the formation of powerful alliances that can enable the growth of networks at a lower cost than today and to expand services quickly to where they are most needed. 

Critics, as you would expect, say the jury in the DePIN case will not be able to deliver a verdict until a lot more evidence is available to show that what is still currently an experimental and unproven approach to a decentralised network can actually guarantee the necessary stability and efficiency needed to provision communications services. If not, it won’t be worth taking the gamble.

– Martyn Warwick, Editor in Chief, TelecomTV