Bringing blockchain to telecoms

Recent years have seen industries across the spectrum try to find their way with, or indeed deploy blockchain technology. We’ve seen in in healthcare and banking to name but a couple. “But what’s in it for CSPs [communications service providers],” asks IBM in a new report, further questioning, “What positive impact will blockchains have on existing processes and costs? Will it help create opportunities to generate more revenue and develop new services? And how can blockchains help CSPs better position themselves-as DSPs or DSEs-in a world that is increasingly all about data, customer experience, trust and digital ecosystems?”

The company believes CSPs will see the greatest impact from blockchain in the following three areas:

Streamlining internal processes

The report recommends employing blockchain primarily for internal efficiencies within the CSP, including interactions with suppliers and other CSPs.

The modularity provided by smart contracts enables various aspects of CSPs’ operations to be streamlined, which helps make them cheaper and faster, as well as more reliable, scalable and transparent. Blockchain cryptography protects information and creates a fully recorded transaction audit trail. There are various opportunities for blockchains to streamline internal processes.

Implementation of blockchain within the CSP environment will likely have the greatest impact on a CSP’s core management systems, such as billing, eSIM provisioning and network function virtualization (NFV) management, where it can help provide cost savings through efficiency gains. Another obvious area for significant cost savings with blockchain is roaming.

Providing services built on blockchain

This means services developed for customers and delivered and controlled by CSPs. The success of digital services cannot be ignored IBM asserts. CSPs transforming into DSPs recognize the opportunity to provide value-added digital services that meet rising customer expectations. But they haven’t been able to capture significant value at the scale and speed of digital disruptors.

Today, there are new opportunities in different areas, such as services based on trust. CSPs have a trusted position in dealing with sensitive data, even more so than banks and governments in most economies. In this context, CSPs can provide a variety of customer services built on blockchain. CSPs frequently interact with their customers, have access to vast quantities of data about their customers, and already provide valuable services through mobile, internet and other channels. Adding new services built on blockchain is a natural extension.

Areas in which CSPs should consider deployment of blockchains include micropayments in exchange for digital assets (for example, music, mobile games), mobile money (subscriber-to-subscriber money transfers, international remittance) and more secure handling of electronic health records. In addition, a key area where CSPs should leverage blockchain is identity-as-a-service.

Collaborating in business ecosystems

CSPs can also use blockchain in digital business ecosystems to handle complex transactions across multiple participants explains the report. In this role, the CSP is the trusted partner and deploys blockchain technology to streamline processes and improve trust among the parties. Based on new business models, CSPs can create additional revenue streams.

For example, blockchain could play a role in machine-to-machine (M2M) and IoT environments, where devices connected to the internet automatically interact with each other by collecting and exchanging data. Blockchain and smart contracts could both monitor and orchestrate these interactions. Recognized as a trusted party, CSPs are best placed to accelerate this development to materialize their ambitions in the IoT space.

The way forward

“While blockchain technology is still evolving, the opportunity to benefit is real,” states the report before listing six questions firms can ask themselves to test their readiness:

  • How efficient-in terms of transaction time, costs, reliability and auditability-is your company in transferring tangible and intangible assets within the organization or to external parties?
  • How much cost could you save if you realized a broad reduction of intermediaries?
  • What is the complexity of dispute resolution and how large is the impact of adverse resolution on the business?
  • What service or revenue opportunities do you believe blockchain could open for you? Could it offer a new path to growth?
  • What role do you like to play in business ecosystems? To what extent do you believe blockchain will be foundational in these ecosystems?


    About The Author


    Arti has been writing and editing for seven years in the fields of technology, business and finance. She is particularly interested in how firms are innovating to bring us into the next digital age.

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