The telecommunications industry has long perceived itself as a platform, an exchange, a broker. In black and white memories, well dressed and politely spoken ‘operators’ plugged cables out of one connection and into another, making connections between different parts of the country, and different parts of the world. In the age of the Internet, the broadband network is considered a platform for national economic growth, not just key infrastructure, but an economic actor with real consequences for the prospects of those empowered by it.
Blockchain, the distributed ledger technology that enables vast, secure and authenticated transactions, challenges once more how the telecommunications industry might define its platform. Machine-to-machine and the Internet of Things technologies have been offering growing opportunities to inject relevance into their business customers, helping them to connect their things — their fleet, assets, and other devices — and build insights and business process improvements from the data yield. Blockchain adds to that portfolio the potential to offer secure transactions amongst partners, and exceptional experiences to consumers.
How? Well telcos have been working for years to develop value added services, and while there have been examples of moderate success, there have been no substantive successes. The Blackberry model was interesting while it lasted; cloud services have to a greater or lesser degree been successful, though the value remains primarily in infrastructure. Take the example of parking in cities.
Several telcos for example have great park-by-SMS type services. They are usually operated by a partner, with whom clients have to register, that in turn negotiates terms with city parking officials and sub-contractors. Assuring the transactions, minimizing fraud, facilitating enforcement, and making parking easier are all objectives of different stakeholders. There are invariably two models for telcos to deliver value for these services: data transport, and billing. They are monetized through message pricing, and mark-up.
Data transport is rapidly commoditising, and alternatives like Bluetooth, WiFi and LORA are becoming increasingly viable for even the most sensitive payloads. Billing remains important, and it is within that that the value of blockchain finds expression. Identity assurance – identity as a service – is one part. Payments and collections processes, micro-payments and other commerce micro-services can all contribute to the telco enablement of ecosystems through blockchain. Blockchain is not just about the ledger, but the services – almost like stored procedures on the ledger – that can offer support services, culminating in what are called smart contracts.
The telco has a trusted position – even more trusted than government and banks — in most economies. There is an enormous opportunity to take that trusted position and make trust itself the heart of the telco value proposition in the coming decades.
Becoming that digital quarterback for the local blockchain economy, facilitating settlements and transactions — it’s long been a dream. Remember — when the dollar was the currency in the twentieth century, banks made a fortune by selling trust.
If data is the new currency, who’s going to sell trust in the twenty-first century?