Opportunities for Applying Blockchain in Roaming
The roaming business is probably 25 or 30 years old and the wholesale part has not changed much since then. However, on the retail side the importance of roaming has increased dramatically.
In Europe, consumers benefit from “Roam-Like-Home”, which means they can use their local rate plans abroad as if they were at home. On the M2M (machine-to-machine) side, as an example, automobile manufacturers equip their cars with SIM cards that need to work globally. For this, they typically work with 4 to 5 large mobile network operators that provide the connectivity for specific regions.
For maximum quality and coverage, Deutsche Telekom has wholesale roaming relationships with over 600 other mobile operators. For all these relationships there are contracts which need to be negotiated, implemented, tracked and settled after the term of the contract. It’s easy to imagine the amount of data needed just for the financial agreement and payment issues. Presently, a lot of this is still done manually. However, as technologies like NB-IoT, LTE-M, VoLTE, ViLTE or 5G evolve, the complexity will rise, and increased automation will be necessary.
I therefore see blockchain solutions as a great, perhaps crucial, value addition. It can support efficiency of processes and greater transparency as more and more operators work together. A first step towards automation in inter-carrier roaming settlements could be to implement agreements via software rather than manually. This would create one source of truth for rates and discounts that could be stored over a blockchain. In a second step, a smart contract could be created that would automatically request the concluded volume data from either a data clearing house or an internal data source and apply the pricing and discounts agreed upon in the first step.
The result of all that would be a uniform settlement sheet that could be easily compared with those we receive from other mobile operators. In the case of disputes, the smart contract could apply an automated workflow. Contingent on the result of the settlement, a credit or debit note could be generated and even the payment could be automated. While the latter is probably still a bit further out, the first two steps are relatively straightforward and would already solve significant pain points.
One of the major challenges to exploit the potential of blockchain is the lack of industry standards and interoperability between different blockchain protocols. This is something that the ITW Global Leaders’ Forum (GLF) is now tackling with the planned launch of a “Carrier Blockchain Network”. The idea is to:
Leverage blockchain technology to manage the contract, agreement, settlement, payment and dispute processes.
Ensure interoperability through development of industry standards open to all ICT service and technology providers.
Build a governance model and membership process to facilitate speed-to-scale and industry participation.
In roaming, this will enable us to handle the increased usage and complexity while:
Limiting the number of employees needed for settlements
Improving cash flow due to real-time capability and shorter settlement cycles
Reducing costs to the Data Clearing House because Call Data Records can be handled via blockchain
In addition, there are further synergies created by using a blockchain network for multiple use cases, such as voice settlement or data-on-demand.
Another challenge for blockchain is the required network effect. The more users a blockchain network has – the more each one can benefit. With the GLF representing more than 25 of the world’s largest wholesale carriers, I am confident that there is enough critical mass to make the Carrier Blockchain Network a success! And best of all: The Carrier Blockchain Network will be open to non-GLF members.