Telcos launch commercial blockchain services to seize new revenue streams

Blockchain, after a relatively slow build-up over several years, is being touted as a revolutionary technology with the potential to reshape many industries, both in terms of their operational and business models, says GlobalData, a leading data and analytics company.

The company’s report, ‘Decoding the Blockchain Ecosystem for Telecoms: Value Chain, Players, and Telco Opportunities’, notes that although still emerging, blockchain is being driven by increasing demand for digital security along with government investments and the promise of reducing transactions time and costs.

Telcos are joining the development of blockchain use cases to enhance wholesale services, improve fraud management solutions and streamline internal processes. Additionally, telecom operators can use blockchain technologies to enhance existing products, for example Internet of Things (IoT) services, as well as to expand their enterprise solutions portfolio and yield new revenue streams, for instance identity-as-a-service solutions.

Lorenzo Solazzo, Technology Analyst at GlobalData, commented: “The implementation of blockchain will support telcos’ digital services transformation to a more competitive, agile, and customer-centric service provider. Key areas in which blockchain can help telcos transform include roaming fraud management, wholesale fees settlement, mobile money payments, and IoT management.”

An increasing number of telcos – including Orange, Telefonica, BT and Colt – are partnering in pilot projects to use blockchain networks in order to increase the efficiency of wholesale fees settlement amongst operators.

Solazzo explains: “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. 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 is also valuable in driving telcos’ service innovation, helping them yield new revenue streams. Telcos have the opportunity to play a role in the blockchain value chain and to provide new business solutions. These include Digital Identity-as-a-Service (DIaaS) and Blockchain-as-a–Service (BPaaS) along with a set of vertical-specific blockchain solutions such as supply chain, quality control and tracking solutions.

Solazzo added: “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 – Blockchain as a Service (BaaS) – 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.”

Several telcos have already started implementing blockchain networks and offering solutions to enterprises through partnerships with global cloud providers and other specialized ecosystem players, or through in-house solutions development. AT&T, for instance, leverages IBM’s blockchain platform, Microsoft Azure’s blockchain technology and AWS’ managed blockchain suite for its BaaS solution offered to enterprises.

Solazzo concludes: “Blockchain in telecoms is still nascent, however, a number of telcos have started positioning themselves in the blockchain value chain and some – such as AT&T US, DU UAE and KT South Korea – have already launched commercial blockchain services to seize new revenue streams.”

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