Piotr Jurowiec on Oct 26, 2018

New blockchain applications emerge every day. Many companies are now looking into implementing it and utilize all the usefulness that it brings.

Blockchain is one of the new technologies that deal with peer to peer data connection and gives an open, decentralized network to use. Powered by consensus algorithms every involved party gets a fair distribution and secure transactions. In simple terms, blockchain application is spreading like wildfire among the established industrial marketplace.

Starting off with simple cryptocurrencies like Bitcoin it has now expanded to the new level of aspects. Industries such as banking, healthcare, insurance, supply chain and telecommunication can increase their efficiency using this new technology.

However, the main question remains untainted, that whether it can be applied to telecommunications or not?

Main Selling Point of Blockchain Technology

Neutral and Transparent: Blockchain system is a distributed network, and the ledger holds every single information for every user to see. It’s all out in the open, so there is no scope for fraudulence. Every single node on the network has a copy of the ledger. This type of approach ensures total decentralization.

Higher Speed: In certain applications, the peer to peer transactions have a better speed count now. Bitcoin network did have lacking points in this regard. However, there are newer blockchain solutions which resolved the issue.

Greater Security: First of all, the decentralized nature of the network ensures the security of the peers’ identity. Secondly, the two-level security keys and encryption makes it even more protected. The probability to maliciously influence the content of the systems is significantly minimized, by the nature of the blockchain architecture.

How Can the Blockchain Upgrade The Traditional Telecommunication Industries?

For the last years, traditional telecommunication industries are facing hard times due to the commoditization of the services and consequently lower revenue and profitability rates. To address new era customer needs, upgrades are a must.

To better compete with other companies and to increase the overall revenue, it’s necessary to utilize any new technology.

That being said, this sector is already on the verge of a great reformation, moving slowly toward to total digitization and virutalization. That’s why adding blockchain into the whole scheme may open up future doors of opportunities.

There are several areas in which blockchain can help telecommunication operators to build new value:

· Preventing Fraudulence

Telecoms suffer significantly because of fraudulence schemes every year. It’s one of the biggest reasons for reduced revenues. According to a survey, 38.1 billion dollars get lost due to fraudulent schemes. To prevent this, companies can use the security level of the blockchain ledger.

To deal with identity fraud, companies can use the blockchain to verify every individual’s identity. Not only that, but they could also, link their devices to the identity on the network. There is already a similar project in the process; however, the new system is a bit different. In this scene, if somehow the identity gets compromised, it will only affect intermediate devices linked to it, not the overall network.

Another big problem is the roaming fraud. This will get sorted out using permissioned blockchain instead of a public one. Every operator that allows roaming can connect to that environment.

So, if an individual meets specific rules, then a smart contract can be executed to settle the costs.

· Managing Identity of Users

Any telecommunication company can add an identity management system with their already existing features. Managing identity would allow them to help users manage their Id’s across, applications, devices, and organizations with only one single password.

As the authentication process in a properly implemented of blockchain is reliable and flawless, using this scheme would be so much easier. A user will contain a master key, and with that, he/she be able to verify their identity in any digital presence.

This can be an excellent opportunity for the telecommunication organizations to grow and spread their realm. A few examples would be Marriage certificates, driver’s license, passports, etc.

In fact, there are already some projects in process in the ID2020 project. The intentions are simple, to give 1.1 billion people a secure and reliable identity management system.

· IoT Factors

IoT factors include security in the data transmission and provide a secure channel among sensors and machine. Telecommunication deals with sensitive information all the time. However, data getting leaked is a typical scenario for them.

It’s one of the basic DDoS attacks. That’s why implementing a blockchain network getaway in the project could give the machines a trusted environment where they can communicate with each other.

This digital control will make IoT more scalable by verifying and connecting two data centers. So, no rouge devices can hack into the system from now on.

However, only using blockchain won’t solve the issue. Collaborating with new technologies and merging all of them would give a much safer environment.

· Mobile Payment

Now with digitization, people are able to pay bills using their mobile phones. However, this new feature has some significant flaws and that’s giving a hacker a chance to scheme innocent people and take their money.

Telecom organizations can use blockchain technology to streamline this process and get rid of any third party intruders.

Is It All So Positive?

Naturally, every new technology comes with its share of challenges and blockchain is not an exception to that. Any company would have to deal with its scalability issue and internode performance issue.

Keeping previous data is one of its perks, but over time it will require more and more storage. The primary challenge would be to figure out in what stage should they imply blockchain in their internal process.

Nonetheless, there’s a massive demand for blockchain and ensuring a trustless environment is all anyone can wish for. Offering additional data security and lower costs are just the positive aspects.

Ending Note

So, does a telco operator need a blockchain? In most of the cases I’ve seen so far, blockchain was utilized as a technology which was a valid option. However, it was just an option and not a real value driver. That perspective changes a lot when we look at utilizing blockchain in solutions which are sector-wide and supporting inter-operator process. Fraud management, identity management, IoT, mobile paymanet are just some of those examples. The challenge here is not a technology anymore, but a business will and consensus which need to materialize between operators.

Blockchain technology comes with a lot of scope for telecom organizations. However, they would have to make some massive changes to thoroughly estimate and add it to the whole equation.

In addition to this, it’s become a necessity, so telecommunication companies should definitely start looking into the matter.

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