How Telecommunications Industry Can Use Blockchain For Innovation If 4G and LTE heralded the era of location-based services, 5G is anticipated to propel presence-based services

Telecommunications industry (telcos), once considered as the pinnacle of innovation, is under tremendous pressure to innovate. Over-the-top (OTT) players like WhatsApp, Netflix and Facebook delivered a strong round of disruptive surprise and pushed the telcos into a downward spiral. With 5G around the bend and setting the stage for the next round of disruption, can telcos leverage on blockchain to offer innovative and cutting-edge services and products?

Next-Generation of Telecommunications

The fifth generation (or 5G) telecommunications network is all about higher data rates, lower latency and a massive mesh of interconnected devices. If 4G and LTE heralded the era of location-based services, 5G is anticipated to propel presence-based services. Imagine walking through an airport without ever having to open your passport or the boarding pass. That day might not be far away with an array of sensors, combined with technologies like facial-recognition, edge-computing, and AR & VR — tracking every individual's movement within an airport.

Plenty of use cases, combining broadband speeds on cellular devices and networked devices, will evolve as 5G rollouts pick up steam. Along with the use cases, new business models will emerge — new trust models, ways-of-working, partnerships and the sharing economy.

As telcos prepare for the next wave, let's look at the key blockchain use cases on the horizon to enhance their existing services/products and offer new ones.

Network and Infrastructure

Telcos inherently are complex and largest infrastructure projects requiring large-scale investments. Billions of dollars have gone into the transformation to current 4G/LTE networks. Many telcos are yet to monetize their investments into existing technologies. Despite no ROI, the pressure to invest heavily for 5G and remain competitive is growing.

As a viable alternative, telcos are turning to infrastructure sharing with other players in the market, instead of doing it all alone. A sharing economy, among the service providers in a region, will bring its own challenges of transparency, timely coordination and intervention, and adherence to the contractual T&Cs.

With its core features of decentralization, transparency and immutability, blockchain has the potential to deliver a level playing field for telcos irrespective of their size, eliminate complex middlemen and distribute value proportionately among the participants. In addition, features like smart contracts, will help create new business models like on/off rentals and pay-as-you-go. Clearly, the era of macro-sharing will give way to micro-sharing and a blockchain backbone will help the telcos get there.

Business/Operations Support Systems (B/OSS)

B/OSS is the heart keeping the telco network ticking. From delivering services on demand to realizing revenues from the delivered services, B/OSS applications play a vital role. The current technologies in use are heavily siloed, inflexible and firewalled, resulting in poor customer experience, losses due to fraud and leakages and gross inefficiencies in the overall delivery mechanism.

From quote to cash, the services rendered by telcos can be viewed as a complex supply chain ecosystem, requiring many interdependent teams, both internal and external. Naturally, blockchain enabled use cases relating to eliminating middlemen in the inter-carrier settlement, preventing roaming fraud and efficient mobile number portability are already underway.

In addition, telcos should start exploring blockchain for efficient supply chain management, building a participatory marketplace involving partners and consumers and data fraud protection.

Emerging opportunities

We are moving into an anything-as-a-service economy and telcos will be no stranger to it. There are two waves of opportunities for telcos to consider: repurposing existing services/products; and building new offerings for the market.

While a lot has improved in the past years, telcos still have much ground to cover to meet the rising expectations from the customers. Inflexible pricing bundles will have to give way to flexible options. If mobile money can be transferred freely across networks and customers, why not other items of value like airtime and access to the network? Fungible services and networks will deliver better bang for the customers' buck.

We are at the cusp of a new technological era and new technologies bring new opportunities. Given their market share, deep insights on customer behavior and implicit trust consumers place on the brand, telcos must fully utilize this opportunity. New avenues for growth and revenue — like Identity-as-a-service, data & device security, content ©right management, and even blockchain-as-a-service — are opening for the telcos.

Whether telcos are relegated as a dumb pipe or regarded as a value stream, the choice is entirely up to them.