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Blockchain: bringing value to telecoms

Blockchain’s importance within the telco sector is surely set to increase over the coming years, particularly in areas such as identity management, and roaming and settlement-related issues. But where does the industry stand with this currently?

13 May 2019
Blockchain: bringing value to telecoms

Blockchain: bringing value to telecoms

Download the related report Blockchain: Where’s the value for telecoms? for further details guidance on how, when and where to deploy this exciting new capability.

With communications service provider (CSP) revenues and business models coming under growing pressure, blockchain’s ability to improve critical processes – such as roaming and identity management – while facilitating new business models, means interest in the technology is growing fast. Already, according to a 2018 study by IBM, more than one-third of CSP executives are either considering or actively engaging with the technology.

Blockchain establishes a shared, immutable record of transactions within a network. Each digital transaction is agreed by consensus and the transaction is then time-stamped, becoming a block in a chain of blocks. If a change is made to one copy of a block, all the other copies are simultaneously updated also. In this way, a blockchain represents a true, accurate and – perhaps most importantly – trusted record of each transaction made. The technology is especially well placed to facilitate roaming and settlement-related issues. According to Vincent Seet, Globe Telecom’s Head of Enterprise Architecture, “We envisage blockchain will remove the need for a data clearing house. All partners engaged in roaming transactions will maintain a blockchain record, so they will know how and when the roaming occurred.”

Telefónica is also playing an important role in this area, and has successfully completed a blockchain proof-of-concept project aimed at settling voice transactions between multiple carriers. According to Enrique Wong Lam, Telefónica’s Head of Voice Wholesale Product Marketing, blockchain is all about creating trust. “Of course, we have very good relationships and partners. But, at the end of the day, business is business. We use blockchain to bring trust to the process.”

Likewise, Deutsche Telekom is deploying blockchain in order to simplify roaming agreements, and has developed its own approach based on open source Hyperledger Fabric. According to Erik Meijer, Deutsche Telekom’s Head of Innovation, “Blockchain needs an eco-system, and what [T-Mobile US] did was to solicit the open source community to integrate on the Linux stack.”

Blockchain can also add value when it comes to identity management, and Vodafone is among a number of CSPs currently focusing on this area. “For identity management, it’s about the user experience. It enables automated and seamless identification of the customer,” states Pierguido Caironi, Vodafone Group’s Operational Excellence Manager. In addition, given its clear links to cryptocurrency, blockchain is highly relevant when it comes to e-commerce and payment systems; its inherent security means the technology can both protect transaction data and prevent the theft of financial information.

Blockchain’s importance within the telco sector is surely set to increase over the coming years, and TM Forum intends to play its part in this development. TM Forum has published a new report, ‘Blockchain: Where’s the value for telecoms?’, in this month and will continue its Catalyst Project, Blockchain Unleashed, at Digital Transformation World 2019 this week.