A foundational building block

A foundational building block

cropped bc image.jpg

For telcos looking to automate increasingly sophisticated transactions, blockchain presents the first step in the journey. By Gopikrishnan Konnanath, SVP and service offering head – blockchain and Oracle services, Infosys, and Manah Khalil, director – identity, fraud platform and emerging technologies, Verizon

The Covid-19 pandemic is having a profound impact on almost every aspect of our lives. In response to lockdown measures, and for the safety of employees, many companies have adopted or expanded remote-working practices, leading to a striking change in our behaviour and needs within communication networks.

On the one hand, it is reshaping how communication networks are designed and managed. On the other, it is compelling communication service providers (CSPs) to re-prioritise investments for improving or maintaining service levels at lower costs.

In order to meet this new demand, the telecom industry needs to maximise capacity utilisation and accelerate their innovation. Investments in technologies such as 5G, AI and blockchain are facilitating revolutionary business models that offer transparency and privacy, while addressing the emerging operational and business requirements. Innovations in business models led by 5G and network slicing will require systems that can be trusted by all stakeholders in an ecosystem.

This can be accomplished with blockchain and distributed ledger technology (DLT), driving greater collaboration among partners and competitors. Interestingly, CSPs are collaborating with the industry consortia such as MEF, CBAN and TM Forum to strengthen the DLT value proposition and establish standards.

Expanding the DLT footprint

As blockchain and related technologies pass through the trough of disillusionment amid the hype, network owners and mobile virtual network operators (MVNOs) have started focusing on initiatives that incorporate realistic business goals. Consequently, the volume of blockchain experiments has reduced, clearing the way for more strategic programmes.

In its early days, DLT use cases within the telecom industry were mainly focused on cross-carrier interchanges and disintermediating data clearing houses, such as exchanging roaming call detail records over a blockchain network. As the DLT platforms mature in performance and scalability, industry leaders are venturing into several new use cases – the most significant being contract management. 

Bilateral contracts are common in the telecommunications industry. These contracts not only ensure seamless voice connectivity, but also drive next-generation services such as IoT, VAS and OTT. Take, for instance, a roaming contract between two operators, such an agreement will include rates, service-level agreements, taxes and so on among several other terms and conditions. Invoices need to be generated based on the agreed terms applied over the roaming usage data periodically. A DLT-based billing and settlement solution powered by smart contracts will usher in a new level of transparency and automate reconciliation while simultaneously reducing invoice discrepancies and costs.

Similar benefits can be realised by telecom operators that lease capacity to MVNOs. In lease contracts, last mile visibility is often a challenge. An inconsistent view leads to degraded service quality and revenue loss.

The core principles of DLT design allow complete traceability of contracts across all stakeholders in the ecosystem. It also ensures consistency and compliance with contract parameters. Another use case is the user experience: telecom services providers have access to a huge repository of customer information, which needs to be handled with the utmost care and confidentiality. DLTs can play a big role in streamlining identity and access management, providing seamless user experiences without compromising on customer privacy.

Making the case

For 5G network slice-based business models to mature and achieve scale, multilateral contract management systems need to become more sophisticated. Contracts should be adaptive and transient in nature – capable of responding to fluctuations in demand.

Blockchain and DLT-based contract management solutions will enable telecommunication enterprises to execute nuanced contracts, and prevent revenue erosion or penalties, while safeguarding data. In addition, DLTs can support execution of contracts that demand multiparty collaboration, such as a global shared repository of fraudulent numbers or visibility into the last partner or transaction.

As the post-pandemic world settles into a new normal, DLTs and blockchain have the potential to become foundational technology that propels underpinning enterprise applications into the future. It has the potential to transcend years of technical and operational debt by enabling data consistence and seamless communication.

Notably, DLTs will bring down the cost of collaboration, and make decentralised, multilateral decision-making real. This simple technology holds the potential to fundamentally change the way the telecom industry competes and collaborates.

Of course, there are several deterrents to adopting DLTs at scale. Business leaders and their technology counterparts should nurture their teams on core blockchain technologies along with soft skills such as negotiating, financial modelling, risk mitigation and so on.

The pandemic will take us into a world where enterprises will need to orchestrate talent across diverse teams to operate distributed applications as more and more use cases go live on blockchain.

Gift this article