This article discusses the integration of blockchain technology and telecom sector for solving the prevalent problems with the applicable use cases that provide a valuable lesson for the betterment of the telecom sector in the future.
The digital transformation has brought our world forward by providing efficiency and better problem-solving capabilities. Telecom Industry’s evolution has helped to gain the digital world where we live today, yet the technological revolution is continually changing and the industry is trying to match up the need of the public.
The innovation of Blockchain technology has leveraged in many sectors through its trust-building and transparent nature. Blockchain is one of the innovative technological innovations that can truly bring changes to the telecommunication industry and ultimately assist in the business model transformation. It can advance strategic objectives that lay the foundation for a digital economy network and ultimately transform its business model. Different countries have adopted the blockchain technology in the telecom industry for achieving its maximum advantages. The early adopters are certain to benefit in several ways in the future.
Problems and Challenges in Telecom Industry
The medium of communication is ever changing in order to deliver the core services and match up the demand, the telcos need to improve with the updated technology and network services respectively. Telecom industry today has the most complex operations frameworks. It involves partners, vendors, customers, distributors, network providers, the involvement of multiple entities has increased the difficulty even more. Besides them, there are many other challenges faced by the telecom industry. Some of them are:
Gearing up for IOT:
The integration for the IOT with our daily life is rapidly increasing and the number of connected devices is expected to be 21 billion by 2020. As the number grows, the demand of platform to support those levels of connectivity will soar for sure. Due to this, the telcos are under a lot of pressure to create a converged platform that provides sufficient functionality to support the full weight of IOT. The security of the IOT is another challenge as the fragmented protocols of IOT networks are also often the common targets of the malicious attackers.
Decrease in Voice revenue:
Before any technological innovation, the channel of communication was entirely different than we have now. With the enhancements, voice and text started its dominance in the communication industry, now it's the era of internet messaging and Voice Over Internet Protocol (VOIP) to communicate by audio through an internet connection rather than using the traditional analog connection.
The voice revenue was one of the largest sources of income to the Telcos previously, now with the increase of VOIP companies the number has dropped. However, it's high time for the industry to find alternatives or any other mechanism of income through VOIP.
Development of 5G:
5G, the latest generation of cellular mobile communication is supposed to improve the capacity and latency along with an increase in the speed of the spectrum. It will also facilitate the development of IOT by completely transforming the mobile technology.
5G is expected to launch among the public by 2020. A lot of companies are investing in 5G technology to support their smartphones and other IOT devices. At the same time, Telcos are under a lot of pressure to compete with the giants including Apple. Similarly, huge investment is required accordingly to produce a network with 5G capabilities.
Security of network:
The security of the networks is one of the major issues faced by telcos. These days, finding the solution to the emergence of new threats powered by the new technologies has become the highest priority of the telecom industry.
Since providing high-quality data and voice services at an affordable price is one of the important requisites of telcos, numerous operational and technical innovations are required in order to meet the expectations of achieving complete security, which in turn is really challenging.
Use Cases of Blockchain in Telecom Industry
Currently, the telecommunication network is a centralized network which doesn't guarantee the privacy of any user. The core values of decentralization could be applied to modify the entire telecom infrastructure leading its advancement.
The implementation of blockchain in telecommunication can ensure the balance move towards different aspects such as network enhancements, Operation Cost reduction, ROI, CSPS (communication service providers) competition growth and OTT (Telco-Over the top).
Here is the list of different application sectors of blockchain in the Telecom industry.
Among many others, one of the biggest problems faced by the telecom industry is detection and prevention of the fraud. There is over $38 billion loss annually due to the existing fraud in the industry. The complexity of the telecom network and its vulnerability makes it hard for the detection of fraud and on the other hand, the telecom industry has not yet found the effective and sustainable solution to address this major problem. Blockchain technology along with its ability to detect fraud can be used in abolishing the prevalent frauds. It could be used to abolish identity fraud particularly.
One of the possible solutions to eliminate fraud is by the creation of a unique virtual identity for each user. This unique identity can be encrypted and stored in the blockchain that provides authentication services to both subscribers and business partners. Telcos could not only mitigate the losses from the fraud, but it can also unlock new possibilities for revenue. Since blockchain can link both the device and the user’s identity, it can impact every service associated with that identity and ultimately lead to fraud prevention.
Rid of middleman
The prevalent middle representatives at various levels require the service charge accordingly increasing the expenses of the industry. Blockchain technology cuts off the involvement of any middle man that assists in making the easier, safer and fairer transaction process. Telcos could benefit easily from blockchain and save a huge amount of money.
According to the communications service provider CIO from the United States, ”Blockchain will provide a secure platform, the possibility to omit third-party intermediaries, and security measures against fraud and cybercrime.”
Online security is one of the global concerns. Blockchain technology runs with the decentralization concept and supports the secure transaction removing the risk element and guaranteeing the transparency. All the transactions are stored in the ledger which could be verified easily since the transaction stored in blockchain are encrypted, time-stamped and synchronized with the entire network. Anyone trying to alter the records could be caught red-handed easily. The nature of blockchain makes everyone in the chain to have full control over the data eliminating the single person’s authority.
Blockchain can establish a secure record of the identities for the people, assets, personal devices and also has the ability to connect with the IOT sensors. The decentralized ledger could reduce the fraud and strengthen the trust between the transacting parties for identity as a service. On the same way, the proper detection of identity can be used to minimize the fraud, track the overall content and direct the proper royalties.
There are different Chinese companies like China Mobile, China Unicom and China Telecom joining as a part of the Trusted Blockchain initiative of China Academy of Information and Communication Technology (CAICT) which is a research body under Ministry of Industry and Information Technology. These companies along with blockchain adoption have expected to force the client identity verification with the internet of things.
Automate the transaction
Blockchain excels at handling and recording the transactions in the unalterable network which provides decentralized solutions to the issues occurred in the transaction process. Smart contracts can automate and execute different business logic by creating settlement efficiency among the parties based on the commonly agreed rules. The rules are encoded and transparently govern the overall transactions.
Mobile operators could publish their own offers as a smart contract which would be available to all the operators. The operators could provide with different offers from which the subscribers can choose their preferred ones. A smart contract could be created after the selection of each of the offers. Further, the digital identity along with all the transaction history is stored.
Securing and managing IOT networks:
There are many cases where Telcos are becoming the leading IOT service provider. With blockchain, a great level of security and automated management of device identity, authorization, provision, and transactions are possible. The main advantages of this integration are the decrease in authentication times and a simultaneous increase in the potential of demand-based revenue streams for the device data. Blockchain can minimize the attack surface of vulnerabilities while smart contract extends the provision of failing or compromised devices. The next generation of IOT services can be achieved with the help of blockchain and smart contract with the cryptographic security, identity as a service, autonomous management and new revenue opportunities by monetization of the data.
Dynamic and high performing 5G networks:
The 5G networks along with the dynamic connectivity of billions of devices across an array of the access point, including vehicles and the smart cities make it quite complex. The delay faced by telcos to build complicated 5G networks can be accelerated using the blockchain. The technology could be used to autonomously monitor and regulate their networks. Also, it can be used in each of the access points which acts as a monitoring node, optimization of the bandwidth allocation and its dynamic security. The set of rules and regulations for access can be set using smart contracts that executes autonomously from any point of the network. The network not only provides the best connection but also store all the request.
Telcos using the stronger blockchain network can take an industrywide approach and update their network infrastructure and transactional ecosystem. 5G, the services of the next generation provide greater optimization of the network allocation and usage and compensate accordingly using the decentralized technology.
Future of Blockchain in Telecom Industry
The prevalent issues of telecom sectors could be easily addressed by the proper implementation of blockchain technology. While its uses cases are still under discussion, research or experiments, there are lots of other reports and experts advice about massive possible growth by the integration of blockchain in the telecom industry in the coming years.
According to report published in July 2018, a global market research store, Research and Markets, the integration of Blockchain in the Telecom industry is estimated to be valued to $1 billion by 2023, which currently is $46.6 million.
This report undoubtedly explains the brilliance that could be created by blockchain in the telecommunication field sooner or later. No doubt, the adoption rate of blockchain has increased by 84% (flat increment) which might be surprising or promising, both at the same time.
Also, the chief architect of Hong Kong-based blockchain startup, previously a Huawei engineer, Allen Li, said: “In the next three to five years, we can expect to see more than 60 percent of telecom services use blockchain technology.”
The buzz created by the hype of this technology has triggered the interest of many big corporates including IBM. IBM has declared its interest in blockchain through many cases and clearly defined its intentions in mixing telecoms and blockchain. In January 2018, IBM has published a report “Blockchain in telecom: from concept to reality and explained the possible potentials clearly. We can certainly expect IBM leading the telecom industry with blockchain technology as well.
Also, the telcos of India are also working with IBM in the blockchain. They have even reached the proof of concept (POC ) stage for demonstrating different ways for the development and implementation of blockchain based products.
There are also different companies that have backed the government’s effort in the blockchain revolution, for an instance network equipment supplier ZTE Corp, payment services provider Union Mobile Financial Technology, and blockchain startups ChainNova and Qulian Technology.
Several other Telecom companies like Telstra, Sprint, NTT DOCOMO Ventures Inc and Verizon, etc. have already started investing in the blockchain technology for conducting the research and apply as the solution. The adoption rate of telecom industry will rapidly increase for sure. Let's hope to see more collaboration of big telecom giants in the adoption of blockchain for the betterment of the telecom sector in the near future.
The application of Blockchain in telecom is indeed a powerful concept which easily justifies the hype created by it. Considering Blockchain’s enormous capability to disrupt the world with all these use cases we can surely expect the boom of the telecom industry in one of these days. Embracing the blockchain technology offers a path for fairness, strengthens the security measures and eventually increases the revenue streams. Telecom industry could do much more and blockchain is certainly a medium to achieve that.