Blockchain for telecom: Operational systems and business applications
1. Introduction to blockchain
It started with a Hash function… then the data blocks…then the chained/permissioned data blocks and mining … then distributed Hyperledger and smart contracts completed the picture to provide management and business applications for public, private and hybrid networks across all the industries.
After serving first financial organizations and enterprise supply chains, the blockchain technology is being used to build powerful business applications and to resolve major challenges of the telecom operators.
This technology ensures a balanced move forward into various vital and parallel aspects such as network/infrastructure enhancements, operational costs reduction, superior ROI, OTTs and CSPS competition, new internet services generation aligned with the changing customer behaviors and lifestyles while taking full advantage of advanced network capabilities (4G/LTE, 5G).
Mobile communications are exponentially vital to individuals, to communities, to businesses, and to the wider economy. Research analysis shows that there are more than 2,500 telecom operators across the globe eliminating distances between people through data or voice connectivity.
More and more, and for good reasons, the industry is adopting the blockchain technology to take advantage of fascinating applications, new features and capabilities. It is paving a concrete leap in the way to manage transactions compared to the old-fashioned traditional systems.
In addition to other carrier members of the ITW Global Leaders’ Forum (GLF) that are involved in blockchain initiatives, blockchain trials (POCS) are successfully carried out by companies such as BT, Telefónica, PCCW, Colt in, Telstra, HGC Global Communications, just to name few of them. Other operators, such as South Korean Telecoms Giant KT, have built their own blockchain.
The PoCs (with extensive features) demonstrated that the blockchain technology is reducing drastically the operational costs and eliminating many unnecessary outdated systems while uncovering new business streams with an unprecedented quality in monitoring transactions in real-time. Chained Data Blocks, Smart Contracts and Distributed Hyperledger bring full transparency and security to the users and organizations levels. Another beauty of blockchain is the quick ROI.
2. Telecom market background
Telecommunications is generating around 6 Trillion Dollars in revenue annually which includes, but not limited to the internet, data, voice communication and broadcasting. The changing environment of telecom business has forced telcos to get away from limited legacy business models and to adapt latest technologies to cope up with current market trends and demands. Our research shows that a sum of over $332 billion is annually spent on mobile voice/data services and mobile digital advertising.
Based on a survey (by IBM) of C-suite executives from the telecommunications industry, a significant percentage of CSP-organizations are already considering or actively engaged with blockchains. Eighty-seven percent of surveyed executives, said the customer is an important role affecting their ability to move forward with blockchain at a commercial scale.
Editors note: This is part 1 of a three-part series that will be published this week.
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