Why blockchain is the future of telecoms

By Ahmad Sayed, Regional Head and VP of Sales, MEA at Nexign for CommsMEA

April 15, 2019

Blockchain is now, decidedly, not a fad. It has reshaped several industries worldwide, including here in the Arabian Gulf region. In Dubai alone, initiatives around blockchain are proceeding at a heady pace. In October 2016, His Highness Sheikh Hamdan bin Mohammad bin Rashid Al Maktoum, Crown Prince of Dubai, launched the Dubai Blockchain Strategy, which aims to create a paperless government by 2020. In March last year, experts on a Smart Dubai panel urged banks in the UAE to digitise in preparation for blockchain. And in January this year, Dubai telco du joined with Dhonor HealthTech to work on the country's first patient-safety blockchain.

In fact, a report from Research and Markets, estimates blockchain in the global telecoms market will grow at a CAGR of 84.4% between 2018 and 2023, spurred by the technology’s ever-improving compatibility with operational support systems (OSS) and business support systems (BSS). The capability of blockchain to map onto an operator’s business functions, in ways that add instant value, will undoubtedly drive widespread adoption throughout the GCC and beyond.

A new global marketplace

A full-platform blockchain BSS has the potential to open communications service providers’ (CSPs) business models to reengineering on a scale previously unseen. Consider the possibilities. On joining the global marketplace, operators can immediately publish product information, on the distributed ledger system, for roaming visitors on their network, or purchase product offerings from other telcos in the community and then sell these either as-is or bundled with other services and products, to their own subscribers—this model is analogous to a wholesale stock exchange. Not only this, as part of this community, CSPs can also create complex bundles with digital non-telco services. This allows an unprecedented streamlining of inter-operator collaboration on a global level and the ability to offer individually determined volumes and quality of service to subscribers in their native self-care channel and language. This is a fresh proposition for the sector.

The very nature of blockchain guarantees trust between participants, facilitating robust and secure sharing of financial and identity information among mobile network operators, non-telco service providers and the subscribers. Roaming becomes seamless for the subscriber, who can now buy service packages at will, and more importantly, at local rates, from their home mobile operator, without the need for a travel SIM or a local SIM from one of the operators in the country they are visiting. The blockchain platform becomes a global community of buyers and sellers, embedded into the BSS of each operator and consistently adding value through the optimisation of previously unwieldy business functions. Operators, now capable of spicing up the customer experience, will boost their customer bases and their revenue, without any significant additional costs.

No more intermediaries

Blockchains, like the one described, are not theoretical, but real works in progress. Platforms will have full support for e-SIM profiles exchange (for both human subscribers as well as IoT devices that are now common-place in sectors such as automotive, consumer electronics and logistics), Internet of Things (IoT) Apps tokens, non-telco services and application service provider (ASP) subscriptions. Operators will be able to tailor their own authentication service as they see fit, publish their own tokens and sequences, and sell direct to partners without any need for intermediaries. This is another industry first.

Again, consider roaming. In the past, inflexible one-to-one agreements stifled innovation, but a blockchain-driven BSS allows multiple operators―that choose to join the global marketplace—to buy and sell units of services to roaming subscribers, without any third party causing technical hurdles and making things difficult for end users and operators.

Whether a subscriber is data-heavy, OTT-oriented or a light voice user, the exchange of offerings across the global marketplace allows packaging, on the fly, by the home operator, in the subscribers’ native communication channel. Tokens act as guarantees and facilitate the dropping of the intermediary. Additionally, the blockchain stores preferences, so when a user moves from one network to another, the BSS of the active operator will know what services to push to that user—remember the importance of personalised offerings in the age of the millennial cannot be understated. The platform transactions have the added benefit of existing in isolation of ongoing agreements, thereby generating a separate, incremental revenue stream.

In the Middle East, where telecom monopolies and duopolies are common, blockchain-driven BSS solutions are of vital importance. All the benefits of incremental revenues apply, and there is no requirement to relinquish any control in the local marketplace, as operators are part of a global community of buyers and sellers. And as identity management and protection become the paramount talking points throughout the sector, so will blockchain integration become the obvious solution. The blockchain can optimise everything a telco’s C-suite worries about—billing, provisioning, number portability and more―and acts as a potent agent of digital transformation, delivering significant operational efficiencies. Transactions are speeding up; intermediaries are becoming a thing of the past; IoT becomes a viable deliverable, as does mobile money; and operators on the blockchain platform can enact direct-carrier billing straight away, all while slashing costs.

Telcos that get in on the ground floor of the blockchain revolution will be poised to become pioneers of new business models in both the B2B and B2C segments. To do so will require astute vision and planning, and recognising the wide range of market use cases out there and how to serve their needs. The benefits of blockchain-driven BSS are there for all to see. I invite you to take the plunge.