Frustrated by Your Outdated Phone Plan? Get Ready for Smart Contracts. The mobile-phone industry must change to keep up with the times.
By Ariel Shapira Edited by Amanda Breen
Opinions expressed by Entrepreneur contributors are their own.
As avid smartphone users, we depend on mobile providers to supply us with the network we need to use Facebook, stream shows on Netflix and send photos to our friends, no matter where we are. And yet most of us sign contracts with mobile providers that go unchanged for years, even with changed talking habits or less internet use — not to mention the hassle of updating a plan when traveling abroad. It's one of those services that leave us wondering: Why, in 2021, isn't there a better way to do this?
Enter smart contracts. Powered by blockchain, and therefore often mistaken for a technology restricted to innovation in the financial sector, smart contracts have the potential to benefit any industry that relies on contracts. While mainstream news outlets still primarily cover blockchain with an eye on Bitcoin's price or JPEGs of apes selling for millions, it's crucial not to overlook the potential of the core technology behind these phenomenons, which is set to transform the backbone of industries such as law, accounting and, yes, telecoms. Most importantly, these changes will come much to the delight of consumers.
Related: Here's What You Should Know About Smart Contracts
An industry in need of an update
The cellular industry today charges customers a monthly fee based on how many minutes they talk on the phone, how many texts they send and how long they surf the web outside a wireless network. Users signing up give an estimate, and if they max out, either they're charged extra or require a new plan.
Without any alternatives, monthly subscriptions serve as convenient payment methods for mobile operators, especially when taking into account most consumers' talking habits didn't vary much from month to month pre-Covid. This was especially true when most people worked full-time at an office, where they used their work phones to make calls and all meetings were in-person.
The pandemic led to more openness to working from home, totally changing the paradigm; 66% percent of employers said in a recent Statista survey they are considering redesigning office space for hybrid work. With employees working away from the office, they are making more work-related phone calls from their mobile phones. On the flip side, they are using their home Wi-Fi more and are not using their mobile data during their work commute. Due to workers' more flexible schedules, it's more difficult to predict exactly how they will use their data. Still, they're paying the same amount they were before the pandemic.
A monthly fee also doesn't take into account breaks when the customer isn't even using the data on his or her phone — for example, when flying abroad. Those who travel abroad either buy a local SIM card or contact their MNO to update their plan. People don't always know how much public Wi-Fi will be available to them, so they estimate how much data they'll need.
This isn't even to mention contacting cellular providers regarding stolen phones — a logistical nightmare. In fact, many Americans pay monthly insurance to deal with these situations, which may never happen.
Related: 5 Ways Hybrid Smart Contracts Are Changing the Blockchain Industry
The path to cheaper contracts
Like finance, and most recently digital art, the telecom industry is steadily embracing blockchain as a tool to improve network security and boost connectivity. The technology's roots in the telecom industry date back to 2018, when early adopters Colt and PCCW leveraged it to settle inter-carrier services in conjunction with blockchain-startup Clear.
Now its adoption is picking up steam, but cryptocurrency and decentralized-finance platforms are often knocked for not being user-friendly enough. In telecoms, the end-user will ideally only reap the rewards, with minimal interaction with the blockchain itself.
While the telecom industry is using blockchain as a way to facilitate agreements between services, it can leverage smart contracts as a way to facilitate the agreements between customers and mobile providers. If customers change their data usage, for example, the contract will update automatically. Smart contracts also keep customer details safe and secure and ensure that all data is kept on the blockchain.
Smart contracts in roaming will detect if a customer travels abroad and allow near-instantaneous charging. There will be no need to buy a local SIM card and certainly no need to get a hold of a mobile-network operator, which will save travelers plenty of their precious time. A blockchain solution can allow telecom providers to store customers' details on the blockchain together with SIM data. This way, MNOs can instantly block a stolen device and notify the customer if a device was stolen.
Smart contracts have the potential to revolutionize the telecom industry by facilitating logistical roaming issues and customer-management problems. Instead of paying the same price each month along with costly phone insurance, customers will pay only according to how much data they use.
Once synonymous with Bitcoin, and more recently associated with other cryptocurrencies and financial technologies, blockchain is permeating industries barely discussed in the tech ecosystem, and it's not likely to stop. Just like blockchain has the potential to revolutionize education and healthcare by creating a transparent environment with a renewed focus on students and patients, mobile providers could stand to provide customers with not only the most advanced smartphones, but also the most advanced service.
