22 March 2018
| Alan Burkitt-Gray
Successful trials of blockchain for wholesale settlement by two leading companies should help all carriers, says CMO
Using blockchain for settlement in
the wholesale carrier industry can reduce cost, improve
operating efficiency and improve cashflow.
But for the real value to be recognised, the entire industry
needs to embrace the idea, says Mike Van Den Bergh, the chief
marketing officer of PCCW Global.
The Hong Kong-based carrier, the international operating
division of HKT, has partnered with Colt and blockchain
specialist Clear in trying out the technology, initially for
wholesale settlement of voice minutes.
"It is a value tool between ourselves and Colt," says Van Den
Bergh. "Right from the start we’ve got to be open
and inclusive. We need to have minimum barriers to
As Colt CEO Carl Grivner explained in a
previous interview, the idea emerged at a meeting of the Global
Leaders’ Forum (GLF), the organisation that brings
together the top executives of the key wholesale telecoms
carriers around the world. Grivner and PCCW Global CEO Marc
Halbfinger decided to try out blockchain for wholesale
settlement when the GLF met at the Capacity Europe conference
in October 2017; four months later the first proofs of concept
had been tried successfully.
"The object now is to promote a new way of working," says Van
Den Bergh. "It has the potential to transform the whole
industry. The value will be in inclusivity – so
everyone is working on a common basis."
Until now the industry has used conventional methods to record
the transport of voice minutes – and other traffic
– across each other’s networks. In the
trials, Colt and PCCW Global implemented a bilateral private
blockchain to record transactions, which were then reported to
a public blockchain. Smart contracts were then used to rate
call detail records, resolve disputes and record the settlement
"The industry is a success because of the levels of trust
between companies," says Van Den Bergh. "Blockchain helps to
reinforce that. It offers new and more effective ways to
Voice minutes were used in the trial "because most players have
a common set of rules", he notes. "The nice thing about
wholesale voice is that most carriers work in exactly the same
way." It made sense for the trial to work with existing
processes "and just apply blockchain", he adds.
Blockchain is a distributed ledger system, with multiple copies
of files making it virtually impossible to distort the
For the trial, Colt and PCCW Global used a combination of
private and public blockchains, says Van Den Bergh. "That
creates a level of resilience. It takes away the need for
If the GLF and the wider industry want to adopt blockchain for
all transactions, what confidence is there that the system will
be scalable? One of the most famous uses of blockchain so far
is Bitcoin and other cryptocurrencies, but they need so much
processing power that they are unsuitable for small
"That’s the advantage of taking a private and
public approach," says Van Den Bergh. Transactions between two
companies can be made on a private blockchain, and then the
overall ledger is replicated on the public blockchain.
The next stage is for a larger number of carriers, working
through the GLF, to do further proofs of concept. "Everyone is
already talking about blockchain and knows it is a good
The trial at the start of this year used live data, so the two
carriers could compare the results from blockchain with the
results using the traditional way of working.
"Normally it involves large numbers of people and days if not
weeks," says Van Den Bergh. "But we were doing it in seconds.
This immediately speeds up settlement." Often the delays are
caused by lengthy reconciliation and dispute procedures.
Blockchain offers the potential to automate that, using what
Van Den Bergh calls "smart contracts".
The project has already "captured the imagination of the
industry", he says. "We have had more and more people knocking
on our doors, even people from outside the GLF."
For smaller players, he adds, "the real value will be created
when the entire industry is working in the same way.
Collaboration is a natural function of how the industry
A public blockchain "will accommodate every player including
the smallest, and they will decide when to implement private
blockchain". The key, he says, "will be to make it attractive
enough, so that the amount of investment will be small. We are
starting to think about the business model."
And Van Den Bergh echoes Grivner’s suggestion that
a later step could be a cryptocurrency that the industry would
use for its settlements.
"It’s an obvious evolution of the model," he adds.
The currency would be convertible into standard – or
fiat – currencies. But what would it be called? Among
the latest suggestions: the Carl or the Marc.
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Van Den Bergh,