Blockchain: How it matters to the wholesale telecoms market

Blockchain: How it matters to the wholesale telecoms market

The biggest questions about blockchain for the telecoms market are: “Where is the bang for the buck?” and “Where and how do we get started?”. If only we had the blockchain Rosetta Stone for telcos.

This article is contributed by Jacqueline Teo, Chief Digital Officer, and Ravindran Mahalingam, Senior Vice President – International Business, at HGC


JACQUELINE TEO, Chief Digital Officer

JACQUELINE TEO, Chief Digital Officer, HGC

Essentially, the core attributes of blockchain’s shared ledger - trust, provenance, immutability and anonymity - can benefit any telco transaction involving multiple parties sharing data, updating data or using intermediaries. This includes many core BSS/OSS functions like trading, settlements, billing, provisioning and fraud management. Telcos can also create blockchain-enabled digital services such as identity management services, digital rights management and secure content management.

However, the value to the wholesale telecoms market is more than the uplift to our internal processes. In a digital world, a differentiated customer experience is a key competitive advantage. We therefore need to take serious notice of how our own customers will embrace blockchain in their own industries. Some widely-touted examples include: 

  1. Content/media industry: Content creators can register origin of work, collaborate and set sharing permissions; pre- and post-production can be done across geographies.

  2. Energy industry: Decentralised consortiums for peer-to-peer energy trading, supply of multiple energy sources through microgrids.

  3. Government: Voting management, including record and identity management, government tenders and agency-to-agency secure communication.

  4. Pharmaceutical or Health: R&D, integrity of clinical trials data, access to health (e.g. genetic) data secured on a blockchain.

  5. Cross-industry collaboration: Block-to-block transactions or block to external platform integration (e.g. Predix.).

Such blockchain applications by nature require non-trivial connected computing infrastructure and an underlying resilient and highly available network. Operators will need more sophisticated software-defined capabilities to meet changing capacity demands. This will be supported by real-time service assurance, perhaps using augmented reality. And performance management, not only at a traffic and packet level, but also at a data level. 

What will be key for wholesale operators is:

  1. Partnering for route diversity and capacity sharing at micro levels: This refers to a distributed hyper ledger at a telco-to-telco scale.

  2. Decentralised network management: Service orchestration, service management, network management and service inventory as blockchains themselves. This can be either through telco blockchain consortiums and/or telco blockchain-to-blockchain, which creates a virtual global managed network.

  3. Data security, data regulation and data breach prevention: We need to be finding better ways of securing our networks end-to-end, including finding the balance between providing AI solutions with the data they need. This would involve securing our APIs, using AI in APIs and/or progressing to conversational APIs, providing network-to-network tokens using quantum computing, enabling zero-knowledge proofs, and other such new principles of data security, data regulation and data breach prevention.

RAVINDRAN MAHALINGAM, Senior Vice President of International Business

Like the internet, blockchain technology is strongest when everyone is using the same network, so in the future we might all just be talking about 'the' blockchain.

One has to wonder why it has taken 30 years from its creation for blockchain to have finally found interest among the telecoms sector to begin with. What is the motivation today that was not there before? Or was it due to the craze of cryptocurrency and its use of blockchain that finally brought the concept of smart ledger and its features to the mainstream? Whatever the reasons, one fact of the telecoms industry which is true is the disruption and acceleration of overall margin erosion in the retail sector as a result of greater competition and technology disruption. This disruption has also impacted the wholesale sector that feeds into the retail propositions.

As we all agree, the wholesale industry in internationals telecoms is the underlying engine that many take for granted. Connecting to the operators globally, both fixed and mobile, for the smooth interconnection and exchange of services, it enables all the services that we use  - voice and SMS on our phones, internet and WAN on the desktop. Hundreds of operators are transacting wholesale services in the billions every minute that keep the global retail telecoms sector working.

Blockchain as a technology offers a solution to some of the industry’s major challenges, such as business efficiency, productivity and scalability. Security is a by-product of blockchain, which is a welcome addition to the IP layer. While it can be argued that all of the above can be achieved through business transformation and the adoption of new IT platforms, the fact remains that IT cannot solve the day-to-day management of contracts, agreements and the speed of clearing the agreed terms. Blockchain seems to offer the opportunity to automate the process from the contract down to the downstream IT platform that does the actual process - in other words the whole chain of agreement right to the final settlement can be automated. When coupled with existing IT platforms, this allows even greater speed and cost management to the wholesale operator. The possible applications are in international wholesale voice, messaging, data and, mobile industry roaming. There are few independent lead projects underway which may reshape the industry. 

Perhaps the blockchain may be a precursor for the return of SDR currency as the mode of exchange, only to be replaced by the hot new technology buzz of cryptocurrency. 

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