Telcos take to commercial blockchain to seize new revenue streams

Although still an emerging technology within the industry, blockchain take-up in the telco sector is being driven by increasing demand for digital security, along with government investments and the promise of reducing transactions time and costs, according to research from data and analytics company GlobalData.

Key areas in which blockchain can help telcos transform include roaming fraud management, wholesale fees settlement, mobile money payments and internet of things (IoT) management.

According to the Decoding the blockchain ecosystem for telecoms: Value chain, players, and telco opportunities report, telcos are joining the development of blockchain use cases to enhance wholesale services, improve fraud management solutions and streamline internal processes. GlobalData sees additional applications for telcos in enhancing existing products with support for IoT services, as well as expanding enterprise solutions portfolios to yield new revenue streams.

The latter potentially include digital identity as a service (DIaaS) and blockchain as a service (BaaS), along with a set of vertical-specific blockchain solutions such as supply chain, quality control and tracking solutions.

The report adds that an increasing number of telcos – including Orange, Telefónica, BT and Colt – are partnering in pilot projects to use blockchain networks in order to increase the efficiency of wholesale fees settlement among operators. AT&T uses IBM’s blockchain platform, Microsoft Azure’s blockchain technology and Amazon Web Services’ managed blockchain suite for its BaaS solution offered to enterprises.

“The implementation of blockchain will support telcos’ digital services transformation to more competitive, agile and customer-centric service providers,” commented GlobalData technology analyst Lorenzo Solazzo.

“Wholesale fees such as interconnection rates or roaming charges are prone to discrepancies and can take more than 30 days to be settled, leaving operators vulnerable to currency fluctuations,” he noted.

“A blockchain-powered platform including multi-lateral smart contracts amongst telcos enables faster settlements, saving time and the costs of the fee settlement process. Furthermore, transactions are digitally auditable due to their unalterable capability, which enables faster dispute resolutions.

“Blockchain networks and use cases development requires enterprises to have a high level of expertise and high initial investments. These costs have created room for a new marketplace that telcos can position on. BaaS creates an opportunity for telcos to enlarge their business solutions portfolio and drive new revenues while helping enterprises adopt the technology and develop tailored use cases.”