The future of blockchain and telcos

What does the future look like for telcos? Think blockchain, blockchain, and more blockchain, claims Cedric DIB.
Blockchain, Telcos, Telecommunications, Tech, Technology, Business, Future

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It started with a hash function... then the data blocks...then the chained/permissioned data blocks and mining … then distributed hyperledgers and smart contracts.

After serving first financial organisations and enterprise supply chains, blockchain technology is being used to build powerful business applications and to resolve major challenges of the telecom operators.

This technology ensures a balanced move forward into various vital and parallel aspects such as network/infrastructure enhancements, operational costs reduction, superior ROI, OTTs and CSPS competition, new internet services generation aligned with the changing customer behaviors and lifestyles while taking full advantage of advanced network capabilities (4g/LTE, 5g).

Mobile communications are exponentially vital to individuals, to communities, to businesses, and to the wider economy. Research analysis shows that there are more than 2,500 telecom operators across the globe eliminating distances between people through data or voice connectivity. 

More and more, and for good reasons, the industry is adopting the blockchain technology to take advantage of fascinating applications, new features and capabilities. It is paving a concrete leap in the way to manage transactions compared to the old-fashioned traditional systems.

In addition to other carrier members of the ITW Global Leaders’ Forum (GLF) that are involved in blockchain initiatives, some blockchain trials have been successfully carried out by companies such as BT, Telefónica, PCCW, Colt in, Telstra, HGC Global Communications, just to name few of them. Some other operators, such as South Korean Telecoms Giant KT, have built their own blockchain.

Blockchain replacing SIM cards?

The SIM card, one of the staples of mobile phones, is facing obsolescence as blockchain solutions offer significant improvements. With the help of new concepts like blockchain, the smartphones of tomorrow may look familiar, but their technology will be a massive leap forward that’s been a long time coming.

While other hardware-based storage tools upgraded to digital technology—much like video games went from cartridges to digital downloads—SIM technology remains essentially the same as it did when it was created. Now, its dominance is being challenged by eSIM technology, which was first deployed by Google. With blockchain’s help, it’s set to hit the wider market and to make a larger splash.

A blockchain-enabled citizen is uniquely and securely identified anywhere in the world, and can use IDs to subscribe to telco services. They can pick a voice plan from CSP-X, a data plan from CSP-Y and video streaming from CSP-Z and so on. Complete freedom of choice to choose the CSP bundles and offers on a single eSIM ID (compared to the cumbersome multiple SIM cards scenario of traditional systems). And this, for any duration (one-off prepaid package, hourly/daily/monthly subscription, etc.). The eSim set-up/provisioning and blockchain technology will offer the options (various services, bundles, etc.) from any/multiple CSPs of user choice/location - a significant revenue stream that still creates substantial profits for CSPs.

The future

Given the importance of the trillion-dollar industry and its control under the hand of a few, makes the disruption of distributed blockchain technology a need of the day.  Blockchain is currently leading the way in telecom innovation and is changing the economic social landscape of digital communications worldwide. It accommodates telcos' biggest needs to make their service offerings elastic as the market changes.

Blockchain technology can resolve the telcos high pressure to cut down the cost, to enable new revenues streams, service efficiencies, and also keep a check on fraudulent practices while allowing a superior customer experience. It eliminates the traditional complex and long chain of inter-related operations that work jointly to deliver services to customers.

Being a decentralised technology, blockchain completely eliminates the role of expensive infrastructure as well as the need for central authorities or intermediaries. It increases the speed and efficiency of the digital exchange of data between people, departments and provides quicker, efficient and seamless transmission of information.

Blockchain looks instrumental in enabling interoperability between internal as well as external systems for telecom companies. This can bring down infrastructure as well as compliance. Blockchain has the potential to disrupt business models by increasing transparency and effectiveness in the telecom network and its processing. 

The usage of blockchain based-applications by the telecommunications industry is gaining momentum, and eventually will become the norm. The clock is ticking.


Cedric DIB is engagement director for transformational systems at Software Solutions and Telecoms.

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