Making the promise of blockchain a telco reality
As the unstoppable wave of network transformation rolls on around the world, disrupting everything it touches, communications service providers (CSPs) are having to manage ever-increasing complexity where the integration, retention, analysis, and delivery of data is concerned.
The volumes and velocity of data crossing a CSP's network and systems, already massively high, are growing to mind-boggling levels of complexity as the amount of data initiated not only by human beings but also from disparate additional inputs including autonomous machines and vehicles, smart cities, connected devices (both dumb and smart), the Internet of Things, robotics, telemetrics and M2M continues to multiply and expand.
Add to that the demands of industry enablement (such as roaming and interconnect settlement, and number portability), operational enablement (including the supply chain), and the continuing and accelerating demand for service innovation (such as compelling new apps and services, identity management and the detection and prevention of fraud) and the breadth and breadth and depth of the challenges facing CSPs become apparent.
The telecommunications industry is 150 years old and feeling its age. It is characterised by its global reach and strategic importance as well as numbers of subscribers, the size of the customer base, long value chains, and relationships with manufacturers. To that can be added the fiendish complexity of organically grown internal processes that have been "enhanced" over the years by a succession of difficult to install and hard-to-integrate, stand-alone, bolt-on proprietary systems that were designed to alleviate specific problems but that actually make life more difficult in the long run.
Concerns are further magnified by the growing importance of identity management and the endless requirement to innovate and compete whilst simultaneously improving efficiency and reducing costs. Bear those in mind, and several other areas of worry and you can begin to appreciate the multiplicity of problems that CSPs now face.
It's a can of worms that CSPs must disentangle and somehow isolate, analyse, prioritise and re-link into a coherent new applied strategy of across the board transformation whilst continuing to keep the business running, providing all their usual services to subscribers and maintaining BSS/OSS and other vital back-office systems even as necessary and unavoidable change is convulsing the entire organisation. Help is at hand though. Blockchain technology has the potential to fix what can be the daunting period of change CSPs have ever faced.
In essence, blockchain is a Distributed Ledger Technology (DLT), a digital register and record of transactions copied and carried across the whole of a network on a blockchain. Each time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. Transactions are recorded with a permanent and unchangeable cryptographic signature called a hash.
The potential benefits of the technology to telcos are manifest but, until recently, CSPs generally, concerned about yet more disruption and expense, were wary of adopting blockchain. However, over the past year, attitudes have changed. Companies providing blockchain solutions have repeatedly proven that the trust, security, transparency, and control across the participating ecosystem for all points in a transaction process that are inherent to the technology translates into lower costs, faster throughput, and improved experiences for CSPs and all involved in the ecosystem and value chain.
Increasing numbers of service providers are now adopting blockchain solutions and are enjoying the improved efficiencies, faster monetisation, and new revenue growth that follow. It is expected that blockchain solutions will become the industry standard and ubiquitous in CSPs across the globe within the next four years.
What's more, with 5G now an operational and commercial reality, both enterprises and consumers are demanding compelling new services and CSPs face further acceleration in the speed with which they will have to track, fulfil and settle wholesale agreements. As more and more roaming data is produced, consumed, and transferred the number of call record details sent from one mobile service provider to another as subscribers’ cross networks will hit historically unprecedented levels. Furthermore, the management of the complexities of managing multi-party connections, containing the costs of billing, protecting margins, and avoiding settlement disputes will be more important than ever.
Blockchain and DLT provide the collaboration, transparency and visibility needed to minimise pricing disputes, ensure accurate reconciliations and increase efficiencies associated with traditional interconnect billing, roaming, clearing, and partner settlement processes. At the same time, it is critical to create applications that are agnostic to the multiple DLT networks and support various blockchain workflows, so it can work at large scale and be widely accepted by CSPs. The technology has the potential to change the way settlement and dispute management are handled across both interconnect and roaming worlds, which will be massively important to CSPs all around the world.
Blockchain is a catalyst for change that offers CSPs great new business opportunities and a radically different competitive future. That's why it is becoming a strategic technology priority to drive end-to-end business transformation across a multiplicity of ecosystems to deliver real, consistent, and measurable value to CSPs and their partners and to enterprises and consumers alike.