Bringing blockchain to telecom

Blockchain is making waves, with many industries exploring its potential impact, and telecom is no exception.  The biggest questions for communications service providers (CSPs) are: “Where is the bang for the buck?” and “Where and how do we get started?”

The good news is the opportunity to benefit appears real. The core attributes of blockchain’s shared ledger approach help provide trust, security, transparency and control across the participating ecosystem for all points in a transaction process. This means the potential for lower costs, faster throughput and improved experiences for all players.

We see the greatest impact for blockchain in streamlining internal processes, building blockchain-based digital services, and providing trust, security and transparency in business ecosystems, including the internet of things (IoT). See figure below.

In IBM’s survey of 174 C-suite telecom executives, we found that a significant 36 percent of CSP-organizations are already considering or actively engaged with blockchains. Of particular interest in this study were those CSPs that are already experimenting with, piloting or implementing blockchain.

For CSPs that want to become digital services enablers (DSEs) by creating and operating platforms such as the Internet of Things (IoT), blockchain could become a foundational building block to handle complex transactions across multiple participants. Indeed, blockchain is becoming a key part of the IoE monetization work TM Forum is doing with members to build the technical foundations for a platform business.

What’s the potential?

For those CSPs already engaged with blockchain, there is a strong focus on its business use cases and outcome potential. The advice for those in early stages of investigation and adoption is to target real use cases and work with partners to learn where the value lies, as well as how to capture and monetize a clear role in emerging blockchain ecosystems.

Ideation sessions focused on digital service provider (DSP) and DSE opportunities will help uncover many areas where blockchain could offer an advantage. We do not advocate a technology-led approach given this is still an emerging area and the business advantage of early movers will be lost if years of tech evaluation prevail.

To move toward reaping benefits, we recommend the following first steps:

  • Spend time with a lead partner in blockchain to understand the business models and technologies, as well as the early use cases, proof points and emerging solutions.
  • Evaluate where the technology stands today, the various blockchain providers and differences between their technology and policy approaches, and the position on standards and regulations appropriate to the country and sphere of business operations.
  • Invest in ideation on potential opportunities in both the revenue growth/platform business area and internal efficiencies.

We believe blockchain has a bright future and the potential to change the way CSPs transact with their partners and execute core business processes. The time is now. CSPs need to take the first steps toward building real use cases and applications and, most importantly, understanding the opportunities blockchain offers.


    About The Author

    Global Telecommunications Industry Leader

    Rob van den Dam is the IBM Global Telecom Industry Leader at IBM’s Institute for Business Value. He leads strategic thought leadership in telecommunications – with focus on future agendas and industry outlooks – and is a contributor to IBM’s global telecom strategy. Rob has about 25 years of experience in the telecoms industry and has worked in a range of advisory and implementation roles for major telecommunications, media and government organizations. He periodically presents or participates in panel sessions at major industry conferences, and has published multiple articles in leading telecom magazines.

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