PCCW Global’s Shahar Steiff explains how blockchain can improve settlement among CSPs
TM Forum Chief Analyst Mark Newman caught up with Shahar Steiff, Assistant Vice President, New Technology at PCCW Global, to discuss the results of an exciting blockchain proof of concept looking at how to use the technology for settlement between CSPs.
25 Jun 2019
PCCW Global’s Shahar Steiff explains how blockchain can improve settlement among CSPs
The International Telecoms Week Global Leaders’ Forum (ITW GLF) is a network of leaders from the world’s largest wholesale operators who are collaborating to drive the next phase of growth for the telecoms industry. ITW GLF members are interested in the transformative potential of blockchain, and in October 2018 announced the successful completion of a multi-lateral blockchain POC led by PCCW Global and Colt Technology Services in collaboration with BT, Orange, Telefónica and Telstra. The team demonstrated the viability of a platform capable of settling voice transactions between CSPs in minutes rather than hours. Supported by technology partner and blockchain specialist Clear, the trial was the first to involve a multi-lateral series of relationships among wholesale providers.
TM Forum Chief Analyst Mark Newman caught up with Shahar Steiff, Assistant Vice President, New Technology at PCCW Global, to discuss the results.
TM Forum Chief Analyst Mark Newman caught up with Shahar Steiff, Assistant Vice President, New Technology at PCCW Global, to discuss the results.
What have you learned from your blockchain POC for inter-carrier settlement?
The learnings are twofold. On one hand we have proven the ability to use AI [artificial intelligence] and blockchain to settle wholesale voice traffic, achieving settled invoices that were practically identical (difference < 1%) to invoices issued following the legacy manual settlement process. On the other hand, we have demonstrated automation and acceleration of the settlement process by reducing the timeline of settlement from weeks to seconds, and reducing the number of systems and personnel involved in settlements by an order of magnitude.
This clearly demonstrates that automation using AI and blockchain can yield significant benefits in the wholesale ICT sector.
What is stopping you from deploying blockchain commercially in your business?
The true benefit of blockchain in the ICT sector is realized on the wholesale level, where disintermediation of third-party intermediaries can reduce complexity and where automation of manual processes reduces timelines and resources. Both those elements also contribute to reduction in cost, and in many cases also yield new revenue streams.
Alas, automation requires a very high level of integration between mutually-suspicious entities, both on the ICT operators’ level and on the solution vendors’ level. This is achieved through collaborative development involving multiple stakeholders. At this point in time, when such collaboration efforts are still in progress, commercial deployments are restricted to isolated environments, within a single ICT operator’s domain.
Do you see any other opportunities in your business for using blockchain?
Blockchain is a technology that can be introduced to multiple aspects of the ICT industry, including payment, settlement, automation, fraud prevention and others. These are prevalent in almost all aspects and products of the ICT sector, including voice, data, IoT, storage, compute and applications. In certain cases, blockchain may be a mandatory enabler for certain features; in others it may be an assistive technology.
How much expertise do you have to build internally to leverage the potential of blockchain?
Blockchain development requires certain skills that are not typically found within the incumbent ICT staff. Hence ICT operators face three options: Train existing staff; hire blockchain-savvy staff; outsource blockchain development to external developers.
External developers often lack knowledge and understanding of the unique environments of the ICT sector, specifically in the wholesale arena. Thus, a combined approach is often required where internal and external resources (either hired or outsourced) collaborate in developing a solution.
Blockchain development, in most aspects, does not differ from other types of software development. Digital transformation creates dependency of ICT providers on software developers, and the balance between in-house and outsourced development varies between operators. In PCCW Global our in-house developers are developing our network automation projects, while blockchain development is primarily outsourced at this stage.
How will you measure the benefits of deploying blockchain? Is it only about reducing operational costs?
Cost reduction alone does not build a business case. There must be incremental value of new revenue to justify migration to a new technology. While no one objects reductions in cost, they are consumed by the ever-shrinking revenues. Our expectation is that Blockchain will yield, through the automation it enables, new revenue streams.
The learnings are twofold. On one hand we have proven the ability to use AI [artificial intelligence] and blockchain to settle wholesale voice traffic, achieving settled invoices that were practically identical (difference < 1%) to invoices issued following the legacy manual settlement process. On the other hand, we have demonstrated automation and acceleration of the settlement process by reducing the timeline of settlement from weeks to seconds, and reducing the number of systems and personnel involved in settlements by an order of magnitude.
This clearly demonstrates that automation using AI and blockchain can yield significant benefits in the wholesale ICT sector.
What is stopping you from deploying blockchain commercially in your business?
The true benefit of blockchain in the ICT sector is realized on the wholesale level, where disintermediation of third-party intermediaries can reduce complexity and where automation of manual processes reduces timelines and resources. Both those elements also contribute to reduction in cost, and in many cases also yield new revenue streams.
Alas, automation requires a very high level of integration between mutually-suspicious entities, both on the ICT operators’ level and on the solution vendors’ level. This is achieved through collaborative development involving multiple stakeholders. At this point in time, when such collaboration efforts are still in progress, commercial deployments are restricted to isolated environments, within a single ICT operator’s domain.
Do you see any other opportunities in your business for using blockchain?
Blockchain is a technology that can be introduced to multiple aspects of the ICT industry, including payment, settlement, automation, fraud prevention and others. These are prevalent in almost all aspects and products of the ICT sector, including voice, data, IoT, storage, compute and applications. In certain cases, blockchain may be a mandatory enabler for certain features; in others it may be an assistive technology.
How much expertise do you have to build internally to leverage the potential of blockchain?
Blockchain development requires certain skills that are not typically found within the incumbent ICT staff. Hence ICT operators face three options: Train existing staff; hire blockchain-savvy staff; outsource blockchain development to external developers.
External developers often lack knowledge and understanding of the unique environments of the ICT sector, specifically in the wholesale arena. Thus, a combined approach is often required where internal and external resources (either hired or outsourced) collaborate in developing a solution.
Blockchain development, in most aspects, does not differ from other types of software development. Digital transformation creates dependency of ICT providers on software developers, and the balance between in-house and outsourced development varies between operators. In PCCW Global our in-house developers are developing our network automation projects, while blockchain development is primarily outsourced at this stage.
How will you measure the benefits of deploying blockchain? Is it only about reducing operational costs?
Cost reduction alone does not build a business case. There must be incremental value of new revenue to justify migration to a new technology. While no one objects reductions in cost, they are consumed by the ever-shrinking revenues. Our expectation is that Blockchain will yield, through the automation it enables, new revenue streams.