Until a few years back, blockchain was only discussed in relation to payments…that too, primarily in the context of Bitcoin. To be fair, that’s how blockchain started. Over the years, the number of non-financial use-cases of bitcoin has been on an accelerated rise. Today, this technology is gaining traction in the telecom sector as technologies such as IoT and 5G start coming into this space.
Blockchain is a distributed digital ledger that enables information to be recorded in a shared database. This technology has been gaining traction owing to the rise of the digital economy and the promise of potentially transforming industries such as telecom and help them succeed in an environment of heightened competition using blockchain-powered applications.
Telecom in 2021 – how things stand
The way the telecom industry connects people has evolved but not changed considerably. Sure, SIM cards have become smaller and now we transmit audio, video, and text over the internet in different ways. Despite this, the core telephone logic based on SIM cards continues to be the same as when they were developed in 1991.
In all of this, what has undergone a complete transformation is the way we treat data.
The speed of transfer has increased phenomenally over the years. This trend will continue with the advent of 5G technology. With 5G comes the promise of low latency, higher volumes of data transfer, and a huge network of interconnected devices. This will also drive the accelerated proliferation of IoT devices and applications and allow us to achieve a variety of previously unimaginable use cases.
Whenever a new technology or capability emerges, the associated vertical sectors decide how, when, and where to leverage its capabilities. IoT technology use, for example, will become increasingly more talked about in the telecom sector as 5G networks mature. The hope is, new opportunities will emerge for operators to offer innovative products and services such as built-to-purpose consumer applications, wide-area IoT network solution, and IoT managed services.
It can be used for remote system monitoring and asset management, be a part of cloud migration strategies, or as an avenue to open up new revenue streams by providing edge computing infrastructure for over the top (OTT) service providers and application developers. CSP’s can use IoT to drive software-defined networking and network function visualization as well.
Both 5G and IoT see a lot of data moving across the network. And it is the capability to use this data appropriately and ingenuously that will help the telecom industry solve existing pain points and become future-ready.
Adapt Business Support Systems for the digital era
Telecom companies need to adapt their BSS for the digital era. They need to capably support the demanding and digitally native customer who wants a consistent and personalized experience delivered instantly. Of course, they must do so while considering all dimensions of the engagement lifecycle. Additionally, there is the challenge of addressing under-pressure traditional revenue sources, caused by the decline of voice services, data commoditization, and pressure from over-the-top (OTT) players.
To drive up profitability, telecom companies need to capably monetize all that 5G enables today and what it can tomorrow. Apart from connectivity to new applications and services, and to drive efficiencies such as Network slicing, private networks, partnerships, and IoT, BSS has to be more agile and secure.
Blockchain can help BSS become digital-era ready and help these internal systems become more collaborative and enable use cases that allow CSPs to eliminate intermediaries in inter-carrier settlements, prevent fraud during roaming and mobile number portability processes.
Fraud prevention
When there is IoT there is data. Unfortunately, where there is data, there is potential for fraud. Deloitte calculates the annual fraud costs for telcos at USD 40 billion.
Network security can be a challenge with the growing proliferation of IoT devices. With blockchain, every element in the IoT environment gets assigned with a unique identity that can be replicated across elements thereby making it harder to access by a third party.
Even if the network is compromised, blockchain manages to put in additional layer security that prevents attackers from using fraudulent ID within the system.
Drive compliance
Telecom operators have to enable technologies such as IoT and drive high connectivity. However, maintaining compliance with relevant laws and maintaining data and security regulations can be a challenge especially when there is a need for the international transfer of personal data.
CSP’s have to maintain compliance and can do so easily with a permissioned ledger system that the controlling party can leverage and place restrictions to prevent nodes from joining the network in certain locations. They can also use this ledger to ensure that the appropriate measures are in place with participants outside the region to ensure compliance
Overcome viability issues of IoT with Blockchain
Blockchain also makes IoT more viable and secure. Using blockchain, CSPs can provide highly secure peer-to-peer self-managed mesh networks employing a large number of nodes. Each of these nodes can be represented by single embedded IoT sensors and can verify every block within the blockchain.
Initially, they can create private networks with relatively low investment and then set up public networks once these are established thereby driving seamless connectivity and security. This is an essential consideration point especially with the growing interest in smart cities that run on IoT devices.
Improve digital asset transactions
CSP’s can use blockchain to implement micropayment-based business models for digital assets such as gift cards, loyalty points, purchase of music, mobile games, OTT, etc. This can drive revenues for CSPs by helping them enable the user and drive monetary transfer services, help them lower transaction costs, and also increase the speed of processing as compared to cash or debit/credit cards or cheques.
Enable smart contracting
CSP’s can capably automate their internal processes using blockchain and make processes such as billing, roaming, and supply chain management more streamlined, transparent, efficient, and error-free. Blockchain can automate the contracting process and eliminate the need for present transactions to undergo a clearinghouse to get approved.
Smart contracts enabled by blockchain guarantee the settlement between the participants and increases transparency to the end customer by routing the settlement from one operator’s Blockchain to another operator.
So, for example, when a subscriber on roaming dials out of the phone network this entire transaction (from the time the call connects up to its end) gets logged and saved on the blockchain network. The smart contract rule defines the charges and accordingly registers the payment. The complete transparency of this process ensures transaction integrity.
Our verdict is that IoT and blockchain will influence the telecom sector considerably. With leading telecom providers such as AT&T, Airtel, Deutsche Telecom, and more exploring blockchain and the maturing of IoT, we can expect faster adoption and deployment of blockchain to bring in the future of telecom. Is your telecom enterprise ready for blockchain?