Out with the Old, in with the New: UMT Token Aims to Become the Universal Currency in Telecom
In today's world, the daily realities change with almost lightning speed. Technological advances bring about social changes, transforming whole industries. In one such industry, telecom, new circumstances are making the status quo unsustainable, which has prompted several new players to attempt to solve the existing problems that plague the industry with the help of innovative blockchain technology and Initial Coin Offerings.
For the past several years it has been becoming progressively clearer that the telecom sector is approaching a critical point, and when it finally arrives, the existing business model may not survive. Traditionally, communications service providers built and owned the entire telecommunications value chain to supply voice and data services to retail and wholesale consumers. But with the unstoppable transition to all things digital and the younger generation's new attitudes to communications, the industry is increasingly facing diminishing revenues from voice services and rising costs due to unprecedented demand for data. Telecom companies have been largely unsuccessful in their efforts to derive significant economic benefit from the torrent of data flowing through their networks, which means that their ability to fund network improvements and come up with innovative ideas is extremely limited. This has made them particularly vulnerable to competition.
The first generation of competition is already here – such Internet-based services as Viber, WhatsApp and Skype have taken a sizeable chunk out of their voice and roaming revenue. By its very nature, roaming is expensive for both mobile customers and their service providers: to offer worldwide connectivity, a mobile network needs to organize the logistics of working with about 900 global operators, contract them, and spend tens of millions of dollars on various fees and other associated payments. And even though in the end all of these fees are shifted onto customers, not every mobile operator can afford the high cost of setting up the service, and this is why, according to data released by the roaming consultancy Starhome Mach, about 70% of the world's roamers stay literally silent, with just 1% of subscribers consuming 80% of roaming traffic.
Moreover, many consumers are no longer willing to pay high roaming charges when they can connect to Wi-Fi and make their international calls for free through a convenient app. Roaming still has its place, when no Wi-Fi can be found, but it has to be a new kind of roaming, and the solution will likely come from blockchain. According to a recent report by Deloitte, "Blockchain adoption could significantly reduce roaming fraud and also optimize ID management through instantaneous and automated processes based on smart contracts." And further, blockchain’s ‘enabled’ trust improves coordination between various partners, due to a shared view of transactions and liabilities. This, in turn, permits the elimination of third parties, resulting in cost savings."
"Telecom's current economic and technological inefficiency can be seen with the naked eye. Unless the industry reinvents itself, it will soon render itself irrelevant," says Nick Evdokimov, Strategic Adviser for Cryptonomics.io, a Los Angeles-based cryptofund. "The opportunities offered by blockchain-driven roaming are unprecedented. Not only will the transition to new technology help meet the demands of today's consumers and revive the largely failing industry, but it also has the potential of bringing great returns."
Typically, if given a choice, travelers prefer to retain their home mobile number and seamlessly stay in touch with family and friends. And it is possible – a fully operational and safe telecommunications platform could upload mobile profiles of foreign operators with selected services on subscribers’ SIM cards. One company, BubbleTone Blockchain, did just that. The team, which has over 20 years' experience in telecom, has come up with an elegant blockchain-based solution for consumers: they simply got rid of the whole notion of legacy roaming.
Such an ecosystem ensures direct, smart contract-driven interaction between end users and mobile network operators, eliminating unnecessary middlemen and drastically cutting the cost of services. Through the app, operators can offer their price quotes for packages of mobile services with great local rates, and customers can choose exactly the amount of voice, text, and data they need in a given country and buy directly from the provider. The purchase is made inside the app with a smart contract transaction and takes effect immediately.
In BubbleTone’s model, smart contracts ensure incontestable agreements between the two operators and the subscriber, which are enforced automatically, and the data is securely encrypted and stored on the platform's blockchain nodes. UMT tokens are used for payments between providers and consumers and can be freely bought and sold via cryptocurrency exchanges.
“I know from personal experience that roaming can be very expensive, and the smaller the operator, especially in smaller countries, the harder it is for customers. I believe that blockchain can solve this problem effectively and transparently. I'm very excited to see such a solid team tackle this problem and I'm really looking forward to seeing the results,” says Mike Raitsyn, co-founder of ICOBox.
Vice President for Strategic Partnerships at Top Connect Mikhail Markin says that as a premium alternative telecommunications company they see this trend and are also making steps to address user behavior and patterns. “Our customers are located all over the world and travel extensively, using our connectivity. The idea of local subscriptions for customers is not new, yet no one has implemented it to its full potential,” says Markin. “We fully agree that in the very near future this is how customers will interact with service providers, having connectivity options right at their fingertips, all in one place and in one device,” he adds.
The entire telecom ecosystem needs to be revolutionized: the outdated and cumbersome concept of traditional roaming needs to be eliminated, and a new blockchain-based system needs to be established in its place.
The future is shaping up as we speak, and according to Mr. Markin, such a subscription technology will soon be adopted by a wide range of service providers, MNO and MVNOs alike. “We see this as a joint partnership of device manufacturers, firmware developers (Android/iOS and others) and service providers. Only by working together and implementing this technology will we be able to stay relevant and be able to deliver a reliable and quality service to customers worldwide."
In this new economy, operators will easily start launching attractive personalized roaming offers, stop losing revenue from silent roamers and unlock a whole new sales channel with an assortment of value-added services offered to their subscribers. This newly-created truly global cryptocurrency-based marketplace will directly connect end users and mobile networks and will be open to a wide range of large and small regional providers, who will no longer have to face a nearly insurmountable technological entry threshold. The introduction of blockchain-based tokens will be instrumental in bringing hundreds of potential new users into the fold and ensure the survival of the telecom industry, albeit in a new and better form more suitable for this new era.