Blockchains have already disrupted some of the biggest industries in the world – like finance, banking, international remittance, and supply chain management to name a few. This is a testament to the fact that blockchains offer radically new ways of conducting business. Blockchains bring with them their primary benefits of trust, security, transparency, and autonomy across all nodes participating in the network. One of the most important things for telecom companies is to innovate in a highly competitive market while at the same time reducing costs. Here are the various aspects of the telecom industry that can benefit from blockchain technology.
Internal Telecom Operations
Second generation blockchains like Ethereum bring with them the revolutionary Smart Contracts. This allows for computer code to execute on its own when certain conditions are met. This has an especially important appeal for the telecom industry as it provides a lot of automation in their internal operations like billing, roaming, and supply chain management. By using smart contracts to handle all of the billing related to roaming, telcos can save a lot of money because of prevention against fraudulent traffic. Currently, transactions within the telecom companies’ ledgers have to go through a clearinghouse to be authenticated. Using smart contracts can automate this process so that none of that post-processing is required which saves time for the companies. In doing so, telcos also save money by spending less on auditing and accounting as the process is automated.
Developing New Digital Services
Telecom companies can provide a host of new blockchain related services to their customers, which can lead to new revenue streams for the companies. Some examples include:
- Digital Asset Transaction – Telecom companies could leverage the cheap payments done using blockchains to enable micropayments for music, mobile games, and other such services. Telecoms companies could also use blockchains for customer-to-customer money transfer services. India saw a lot of telcos moving to this model after demonitization in 2016. For example, Airtel and Jio, India’s leading telcos, both offer their digital wallets to enable customer-to-customer payments. By employing blockchains to handle the transactions, these companies could make their wallets more secure and cheaper. The international remittance market is a multi-billion dollar industry, so taking a small percentage of the market share would help these companies bring in a lot more new revenue.
- Digital Identity Verification – Identity verification costs corporations and governments hundreds of billions of dollars every year. New identity verification systems based on blockchain are already in development by startups like Civic. Telcos should be the leaders and early adopters to this new way of conducting business so that they can make use of these emerging markets. Telecom companies already enjoy a high level of customer trust, so they stand in an excellent position to offer this new service. Telcos are privy to a tremendous amount of customer data as it is, so it makes a lot of sense for them to act as a source of identity and authentication. They can design new systems for both customers and businesses to create additional revenue streams.
- Ecosystems for Collaboration – Telcos who want to become pioneers in offering the next generation of digital services can find blockchains useful for a wide variety of complex transactions. The online advertising industry, which is clunky and inefficient at the moment is ripe for disruption by companies like Brave. Brave uses the blockchain to create a marketplace for advertising where users have a say in how their personal information is used. Telcos are seated in a high position to take adoption further in industries like advertising and the Internet of Things (IoT.) IoT devices are all set to become a $100 billion industry by 2020 and would require millions of machine to machine (M2M) payments to work. Telcos have a unique opportunity here to lead the charge and usher in the next era of digital services.