Blockchain is a $1 billion opportunity for telecommunications companies, but they must proactively make the significant commitments necessary to position themselves for that revenue, according to GlobalData.
The firm says that the telecom industry indeed is gearing up for the challenge. For instance, BT, Colt, HGC Global, Telefonica and Telstra are involved in a trial that uses blockchain for wholesale settlement. Verizon is an investor in Filament, a blockchain firm that eventually could help the carrier handle payment for drone delivery and monitoring services.
Yesterday, CBCcom, PCCW Global, Sparkle, Tata Communications, Clear Blockchain Technologies and Cataworx announced a blockchain proof of concept trial.
Blockchain, according to Accenture, could create a $1 trillion ecosystem. The firm—whose estimate is cited by GlobalData—defines blockchain as a technique that "allows multiple stakeholders to confidently and securely access identical copies of distributed data. There is no need to run a costly and slow interorganization data reconciliation process."
In other words, blockchain is an efficient process of securely updating information across widely distributed systems. It is flexible because there is no central hub through which all data must flow.
The major use of the technology to date has been in cryptocurrency, but blockchain is thought to dovetail nicely with the needs and underlying physical nature of telecom networks.
Significant preparation is necessary for telcos to take advantage of the opportunities, however. GlobalData Research Director Ron Westfall, who wrote the report, pointed to the need for a long-term commitment and integration into DevOps.
Westfall also focused on the need to align blockchain with the network's BSS.
"Blockchain is primarily a software-driven implementation," he told FierceTelecom. "Steps can include integrating blockchain into existing BSS platforms in order to align blockchain identities with revenue management platforms including billing/charging policies, unified catalogs and customer/partner management data. Physical requirements are low although adding server resources in the cloud or on-prem could be required."
Those are significant steps. There are, however, equally significant rewards. The press release pointed to elimination of roaming fees and acceleration of the connected device services market. Westfall added that blockchain also can lower local rates and address the "previously untapped international traveler market" and drive efficiencies in infrastructure management/assets registry and financial and industrial platforms.
There is promise both for internal and customer-facing uses of blockchain. Wholesale settlement, one of the applications to which proponents are pointing, is internal. The external applications are supportive, at least in the early days.
"In terms of service offerings facing customers, blockchain capabilities would augment and boost existing services [such as] enabling mobile services to avoid roaming fees and exposing telco service plans to a vast set of new customers," Westfall wrote.
It's too early to say whether blockchain will find more success.
"At this juncture both internal and customer-facing applications have equal promise," Westfall wrote. "Naturally we will know more by the end of the year!"