Thursday, September 29, 2022

Blockchain and Telecom Operators

Blockchain and Telecom operators

An introduction to Blockchain technology 

Blockchain is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.

According to Euromoney.com, A blockchain is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. The decentralized database managed by multiple participants is known as Distributed Ledger Technology (DLT).

Blockchain role in the Telecom sector 

Blockchain technology has the potential to fundamentally change the way business is conducted, and to transform the foundations of our economic and social systems. One of the major sectors is the telecoms industry, this sector has the ability to adopt this new technology and open up the doors of a new kind of competition. 

Blockchain technology started to emerge in the telecom business in 2018 and has been used for many purposes and is expected to grow in the near future. Telecoms are usually sensitive to their subscriber information such as the airtime/data balance, age on the network, calls, SMS’s, etc. They do their best to keep this information protected from external parties. 

The competitive advantage and the value proposition blockchain is bringing to the telecom industry relies mainly on security, transparency, & integrity for the subscriber and transaction information. 

Blockchain can make the process faster and more secure

We all know that a telecom network has many core services such as operating support system (OSS) and business support system (BSS) which mainly fills the role of a telco partner, sourcing, supply chain, service providers, etc. and managing the legal and financial relationship. These processes are very sensitive as confidential information are usually being shared with these types of information exchange, hence, the value of blockchain will come in as an added layer of security to protect and speed up processing and storing of data.

Why telcos should be interested to adapt this technology?

We have identified 3 main reasons why telcos should focus more on adapting the blockchain technology within their network systems:

1- Cost Reduction 

This advantage relies mainly on automation processes that blockchain can bring and by eliminating intermediary systems. With the trust that this technology brings, this means that in most cases, the middleman can be eliminated.

2- Efficiency Improvement 

The telcos can improve the transaction process with multi-parties by automizing the process in a trustworthy way, particularly with partners who require a monthly verification/reconciliation – this process is time and energy consuming which can instead, be done automatically through blockchain technology while both parties have trust in the end result. 

3- Fraud Mitigation 

In this section, we don’t just mean financial fraud, but we must also consider identity fraud as an important scale in the telecom business; a subscriber’s identity includes, but is not limited to, name, age, gender, location, etc. With blockchain technology, data is protected in a decentralized system where it can neither be deleted nor stolen.

Blockchain and the rise of 5G technology 

With the special and new advantages/features 5G is bringing into the world including high-speed, low latency, and more capacity, this will undoubtedly open doors for new technologies and services to rise up. Telcos will have major input on this while introducing the new OTT and IOT services to the market targeting different business segments whilst ensuring this is being delivered and spread across their network reach. A major issue we noticed here is the miss of a standardized ecosystem. With blockchain technology implemented, everyone will have access to everything, and the competition between small and big companies will intensify. 

Next Steps? 

Telcos are in real competition not only with companies in the same industry but with other enterprises across industries, that might share the same goals and/or targets; these competitors may include banks (while telcos introduce mobile money), retail, airlines (while introducing the loyalty program), etc.

Quick decisions on the roll out plan in terms of strategy is highly needed at this stage. Telcos are urged to start creating a proof of concept “POC” for a real case study in order to take this opportunity forward. 


Article Written by Mr. Hussein Taki, Business Development Director at Mondia Group.