Blockchain a “core enabler” for industry post-Covid
Blockchain could become a “core enabler” of the post-Covid, digitally connected world, providing the seismic shift the telco industry needs to spur its adoption of the technology.
The prediction, made by Hugo Feiler, CEO at Minima, could provide huge opportunity for telcos, however, he continued to warn that slow adoption of blockchain-powered solutions is leaving the market – and telcos – exposed to the impact of significant disruption.
“Blockchain is 10 years in but still in its formative stages. However, there are every so often seismic shifts and the Covid-19 pandemic is changing the behaviour in a lot of industries. I think that blockchain will be accelerated as a result, because as more and more of the world becomes connected digitally rather than physically, blockchain can definitely be a core enabler of that new reality,” he said.
Figures published by Research Nester last month highlighted the “significant opportunities” that exist for blockchain in telecoms. The report estimated a compound annual growth rather (CAGR) of 70% between 2019 and 2021, with blockchain’s market value estimated to increase from US$45 million in 2018 to $1 billion by 2027.
The report attributed growth to increased collaborations between the telecom companies and blockchain solution providers, leading stakeholders to explore potential new business and revenue models. However, Feiler said that telco use cases remain few and far between, and that this leaves the door open for industry-wide disruption.
“As soon as new players come into the market with blockchain as a way of creating competitive advantage, they will have cost efficiencies and flexibility in their systems by using blockchain rather than legacy backend systems,” he said.
“If you get some entrepreneurial upstarts that do that, I think that the technology will continue to be built on and developed and it will come from a combination of forward thinking from network operators who will see the writing on the wall and work out they need to be ahead of the curve,” Feiler added.
Whether blockchain is used to reduce the US$17 billion lost every year to fraud, or capture the $1.4 trillion telco services market, Feiler maintained that telcos are running out of time to transform their systems and that industry-wide collaboration is required.
“Many of the projects are proprietary to specific operators. once you go a level below that and make it lower in the technology stack it becomes something all operators can benefit from. it’s not a case of if it will happen but when,” said Feiler.
He added: “At the moment, the whole blockchain industry is still very much in its formative stages and everybody is waiting for the clear use case. But I think as general business models evolve, once this level of value transaction has been created people can build on top of so they won’t then need to go through the traditional processes that they have used in the past.”