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The telecommunication industry has a central position in the lives of business and people, sitting at the heart of a world that is becoming more connected every day — more digital and more virtual. In order guarantee innovative communication services like broadband and 4G in the recent past and now 5G, communication providers need to bear large investments.
The generation of an adequate return on those investments is challenged by the extreme competition in the industry. Telecom carriers operate in mature and saturated markets, often characterized by high levels of subscriber churn and expensive acquisition costs. Adding new services and products that go beyond mere communication has proven difficult due to the presence of over-the-top providers leading to some of the most lucrative areas of business including social networks, music and video streaming, web search and others.
That is the reason why carriers are now operating according to innovative strategies and are implementing new organizational structures, new technologies and new business models to provide new services and be competitive with non-telecom organization as well as with other telecoms.
Blockchain has been imposed as a driver of this change and an enabler of a new strategic, collaborative approach: the platform business model. Different players leverage industry-wide platforms to provide services and generate benefits, competing and collaborating with the other members.
Collaboration is a strategic imperative
Last week, I had an opportunity to sit down (virtually) with three companies that spent the last few years building ecosystem that made an impact in the industry.
Syniverse has been for a long time at the core of the roaming business, serving hundreds of carriers globally. They were the first to recognize that 5G and internet of things will change the very essence of roaming traffic and that blockchain represented a more transparent and efficient way to leverage such a large amount of data to implement new services and monetization models. Syniverse has embraced a proactive approach to transformation, deciding to anticipate the market and the competition and engaging with IBM to develop a new blockchain-enabled platform.
The new platform will support their business in two ways: on one side it will allow Syniverse to improve the efficiency and accuracy of their clearing and settlement activity in the telco industry, from roaming services to any kind of data that carriers may generate. On the other, the flexibility and scalability of the platform supports the extension of the same services to adjacent industries.
TBCASoft, on the other hand, reinforced the role of telecom carriers as trusted providers developing a blockchain platform that enables telco-led use cases like mobile payments and digital identity. Billions of people in the world interact with communication service providers (CSPs) on a daily basis. We trust CSPs with our personal, location and payment data.
What carriers need to leverage the data and trust is a reliable platform which allows the sharing of data and performs transactions across networks. TBCASoft built such a platform. The platform is a blockchain for telco that enables several use cases, like mobile payments and digital identity. Users can spend money with their telecom provider digital wallet when they are traveling abroad in a near seamless fashion, leveraging blockchain for back-end reconciliation.
Finally, Deutsche Telekom, one of the global leaders of the industry, embodies the transformation we talked about, creating their own blockchain platform, which is open source, accessible to other carriers and developers, with the scope to co-develop the next generation of applications. Deutsche Telekom’s platform can be seen as blockchain as a service, that abstracts from specific protocols and is compatible with every software system.
Innovators in the industry can leverage it to enable their applications with blockchain or to build new ecosystems. In addition to that, Deutsche Telekom also created an application that aims to digitize and improve the wholesale roaming process, starting from translating roaming contracts into smart contracts that enforce blockchain transactions.
How leaders see the future of the telecommunication industry
These three companies are different in size, history and role, nonetheless they all recognized the following imperatives of the telecommunication industry evolution:
- Competition is getting tougher
- Cooperating with traditional and new competitors and other organization in the ecosystem is a way to innovate and generate new business opportunities
- The new business model is a platform-oriented one where utility is distributed across companies that work together
- Blockchain is the ideal platform to manage such ecosystem, since it generates trust, enforces business rules, tracks assets and transactions, and protects data.
I would encourage you to join the virtual panel discussion where the leaders of these organizations will walk you through the role of blockchain in the telecommunication industry and how they are fostering adoption of their platforms and applications, taking into account business benefits, different protocols, governance models and standards.
The future of blockchain
The business models of future ecosystems and platforms will pivot around humans, data, devices and services. Blockchain will empower the self-governing transaction across these components and enable the creation of new values for all participants: most transactions in the future will be enable, approved and guaranteed by blockchain.