How to Apply Blockchain to the Telecom Sector? Is It USeful?
While the telecommunications sector has witnessed some of the most amazing technological advancements in history up close, Blockchain is still relatively uncharted territory for modern telecom enterprises. Nevertheless, some industry insiders think that the telecoms industry’s exposure to blockchain technology would cause the market value to skyrocket from $46.6 million in 2018 to an astounding $993.8 million by 2023.
Before getting into the specifics of how Blockchain could help your organization, it’s critical to understand what Blockchain is and why businesses would decide to adopt it. In 2008, the term “blockchain” originally gained notoriety for referring to a distributed digital ledger of financial transactions. By gathering and keeping a real-time record of the ledger, Blockchain was initially used to securely track cryptocurrency transactions.
Blockchain solutions use a distributed ledger that expands with time, in contrast to conventional systems that function through a centralized database with a single point of authority. Information entered into the Blockchain is permanently stored there. Every change is visible to anyone with access to the Blockchain through a continuously updated ledger that is synced throughout a specific peer-to-peer network.
All blockchains are made up of these three essential parts:
Every bit of data that enters a blockchain is kept as a separate block. A secure chain links various blocks together to maintain a real-time record of how a dataset evolves over time.
Hashing. Every block is protected and identified by a hash, which is an encrypted digital signature. Blockchains utilize a method called proof-of-work to determine whether each hash is unique in order to prevent duplicating information.
Every Blockchain continuously creates new blocks. Block time is how we refer to the frequency of these updates. The Blockchain is getting closer to displaying off-chain events in real-time, the shorter the interval between them.
Many businesses are curious about how distributed ledgers might be used to provide accurate records. Blockchain technology aids businesses in avoiding human mistakes and faulty IT system communication. A sequence of bite-sized chunks can be used to simplify and record complex off-chain events.
Why Is Blockchain Important for Telecom Companies?
Although blockchain technologies have many uses in the banking and supply chain management industries, most telecommunications companies have not yet seen the full impact of this new technology.
— Skey Network (@SkeyNetwork) June 2, 2021
In order to supply its clients with comprehensive and high-quality services, the majority of Technology, Media, and Telecommunications (TMT) companies rely on intricate networks of third-party suppliers. When we consider creating trustworthy, transparent, and efficient systems, Blockchain really shines.
Main advantages of Blockchain for TMT companies:
- Processing and keeping track of direct payments made between parties. Blockchain can assist telecom companies with managing transactions, preventing double payments, and archiving historical data.
- Managing and dealing with assets, intellectual property, and license agreements. Telecommunication companies can manage a variety of business connections with service providers and B2B clients with the aid of decentralized digital ledgers.
- Reaping the rewards of the R&D tax break. R&D tax credits may be available to many businesses that are actively working to create new blockchain technologies.
Protocols that run on their own using smart contracts. Blockchain technology can be used by businesses to automate invoice generation, refund processing, contract renewals, and much more. Smart contracts streamline antiquated procedures, avert mistakes, and reduce dependency on middlemen.
Blockchain in the telecom
The potential uses of Blockchain in telecoms are limitless, from managing digital rights in the entertainment industry to processing domain name system (DNS) services in computer science to managing chain-of-custody integration in the supply chain.
Blockchain can also completely change how telecom companies operate:
- Track gadgets with improved privacy protections.
- Keep an eye on international roaming fees.
- Distribute royalty information for streaming multimedia services.
- Management of 5G network slices’ overseas leases
For instance, Mobile Virtual Network Operators (MVNOs), which are subsidiary data carriers that subcontract their operations to larger mobile networks like EE, is Asda Mobile and Virgin Mobile. Blockchain can connect an extensive network of MVNOs that communicate with one another in harmony and assist larger corporations in managing these subsidiary agreements. As a result, everyone involved can keep track of who owes whom, and all parties are aware of what is happening on the Blockchain.
Is Your Business Prepared For The Integration Of Blockchain Systems?
The advantages of incorporating blockchain technology into your company are obvious, but putting theory into reality is not always easy. The article that follows has more information on the advantages of using Blockchain. Investing in blockchain technologies can be intimidating if you’re new to them and lack the inside knowledge to optimize your current processes.
When organizations determine when, if, or how to approach a chance to embrace new technology, timing is key, just like with any investment.
It’s frequently a good idea to coordinate the transition to Blockchain with other digital revolutions because it involves such a fundamental change in how things are done and necessitates a big overhaul of your company’s IT infrastructure. The optimum time to implement a digital native system is now in order to expedite processes, track progress, and settle disputes.
Optimizing your current program is far more difficult than completely integrating a blockchain consortium into a native system. The second can resemble trying to force a square peg into a round hole.
Analyze the costs and benefits.
The cost of adopting blockchain technology is one of the main concerns for Technical Directors or Heads of Technology in the telecom industry. The first rule of thumb is to perform a straightforward cost-benefit analysis to determine whether incorporating Blockchain would benefit or hurt your organization, as is the case with all advancements. Consider the problems you’d like to resolve and the areas where Blockchain can make life easier.
Even while the initial expenditure might seem pricey, there may be substantial long-term savings. The long-term financial savings of Blockchain can be substantial, whether they come from automating procedures to cut down on labor costs or employing smart contracts to eliminate the intermediary.
Blockchain adds value to the telecommunications value chain by assisting organizations in modernizing their technical foundation and eschewing antiquated technology. Telecom companies must adapt to meet consumer demand as they employ cutting-edge systems to spur innovation and customers seek improved experiences.
Ledger-based solutions that are secure and transparent give telecom companies dedicated network infrastructures for providing overseas data-driven services with a single source of truth. Blockchain can reduce costs related to fraud, customer relationship management (CRM), and even subscription payments if licensing or selling Software as a Service (SaaS) is a component of your company model.
The brain of your company will be a well-run blockchain system. On-chain records make laborious procedures unnecessary, prevent errors, and streamline antiquated operations.
Four-Step Guide to Successfully Implementing Blockchain
After deciding whether Blockchain is appropriate for your firm, the following step is to consider how and where to integrate it. To assist you in deciding which business operations would benefit from an end-to-end blockchain operating system and how to ensure a seamless digital transition, here is a four-step guide:
1. Determine the parts of your business that need Blockchain.
Although there are numerous uses for Blockchain in the telecom sector, each company is different. Technical directors should evaluate their business’s operations and carefully decide which areas are most suitable for integrating blockchain technology.
To decide where to focus your efforts, ask yourself these questions:
Do you handle data with rules?
When working with standardized datasets and preset processes that may be documented in readable blocks, blockchain technologies really shine. Blockchain would be considerably more helpful for tracking 5G data usage than it would be for handling consumer complaints, for instance.
Can you use multiple interpretations of your data?
The capacity to capture and maintain a single source of truth is a key advantage of blockchain technology. You won’t gain from synchronizing single truths across a peer-to-peer network if you operate with ambiguous datasets.
Do you use any procedures that involve a number of stakeholders?
Peer-to-peer networks’ improved accessibility and transparency allow for harmonious collaboration across a variety of parties. Digital ledgers that are decentralized make sure everyone is singing from the same hymnal.
2. Review Any Compliance Issues & Legal Frameworks
When using blockchain technologies, everyone must keep compliance top of their mind. While the majority of commercial Blockchain operating systems will come with built-in compliance safeguards, each organization must take the appropriate precautions to make sure no detail is overlooked.
You may need to take into account the following factors depending on the services you provide:
- Laws against money laundering
- Tax obligations related to domestic and international blockchain transactions
- Credibility and legal foundation of smart contracts
- Industry-specific data protection laws and GDPR
3. Consider all possible risks.
The dangers of implementing Blockchain in the telecom industry must be taken into account, just like with any investment or technological advancement.
Companies must do a thorough risk assessment before giving the go-ahead, whether it’s due to dealing with downtime during the transition period between two systems, trying to pay off the upfront cost of installation, or risking your reputation through system failures.
While technical know-how is required for blockchain deployment, every discussion about implementing new technology needs to include employees from across your firm. To maintain fair governance and prevent unforeseen issues, everyone from cybersecurity consultants, audit committees, finance teams, technical directors, and even product teams must participate in the decision-making process.
Naturally, some risks could not become apparent until after you’ve switched to Blockchain. If so, it’s critical to act quickly to develop solutions and adjust before risks materialize.
4. Who is in charge of overseeing the Blockchain?
All blockchain-based systems must be controlled and supervised by designated employees, despite the fact that decentralized ledgers are intended to eliminate the authoritative control held by a senior group of people. All blockchains require some maintenance, whether it be finding technical assistance in the event of system outages or adjusting procedures to comply with the most recent legislative standards.
Consider how you will pay for the technological infrastructure, who will provide technical guidance, and the protocols you must modify to accommodate various circumstances.