Carrier industry are facing tenacious challenges. They are struggling to monetize the flood of data flowing through their networks. Many carriers are facing significant decreases in average revenue per user (ARPU), minimal revenue growth, and tightening margins. Meanwhile new opportunities such as e-commerce and mobile payment largely pass the network carriers by. The carrier industry needs to be transformed.
Carriers nowadays are seeking ways to leverage new technologies such as mobility, cloud applications, and virtualizations to be more nimble, agile, and able to offer innovative services to their employees and customers. These digital technologies are driving business transformations.
Blockchain is one of the important next transformative digital technology. It comes to public attention with the rising popularity of cryptocurrency, one of its early applications. Popular cryptocurrencies such as bitcoin and ethereum have been pioneers in realizing the potential of blockchain. Bitcoin, which started in 2009, has highlighted important characteristics of blockchain such as its distributed nature and lack of central authority or intermediary.
Although blockchain is pioneered by cryptocurrencies, the technology can be applied for diverse uses. Many applications has been proposed and implemented, not only money transfer and electronic payment, but also secure identity system, supply chain and property rights management.
The promise of blockchain.
In telco industry, the opportunity comes from the fact that databases are widespread: in customer identity and billing information, supply chain management, configurations management, and many others. The ledger in the blockchain can be seen as a special kind of database, and many, if not all existing databases, can be disrupted by the blockchain. In general, carriers should look into the cases of inefficient, expensive, or slow usage of databases.
Several potential use cases are being devised and explored. Some interesting examples:
Carrier settlement: In current system, settlement of interconnect calls and texts billing between carriers can take weeks, or even months. With blockchain, the process can be simplified and greatly accelerated. The traffic can be automatically verified and settled between the carriers, without the need of a clearing house. Blockchain-powered settlement is able to handle fast-paced international voice transactions, securely and on multilateral basis.
Fraud mitigation: fraud is one of great problem for carriers. Annually, fraud can cost the industry more than USD 38 billion. Blockchain is a good contender to mitigate fraud, especially in tackling roaming and identity fraud.
For example, a subscriber on a visited network will trigger a transaction (for instance, a call detail record) which is broadcasted on the blockchain. In turn, it will trigger the smart contract, and calculate the billing to be sent to the home network. This quick verification and settlement can help to mitigate roaming fraud.
A blockchain solution can also utilize public-private cryptography to identify a device and link it with a subscriber’s identity. Instead of IMSI (International Mobile Subscriber Identity), a public key generated from private key stored in the device is broadcasted to identify the subscriber to the network. Because the private key is never published, the identity cannot be easily stolen.
Digital commerce: although modern digital commerce thrives on the back of the carriers data network, the benefit from the boom of e-commerce for the telecom industry has been modest. Blockchain has potential to transform digital commerce in various places, such as payment processing and supply-chain management . For carriers one of the opportunity is in identity service.
Carriers have access to substantial personal information of their subscribers. They can leverage these information for digital identity services, based on the blockchain. The identity service then create a virtual ID using the public key, adds necessary additional information such as name and address, and a digital signature from the private key. This virtual ID then can be used with a partner site, such as an e-commerce site.
We barely scratch the next-generation digital technologies and its advantages here. In order to continue the discussion about what it can do to telco companies these days, Telin will host another Bali Annual Telkom International Conference (BATIC) raising the topic of “Navigating in the Borderless Digital World”, containing 2 days conference, where blockchain will be one of the topics that will be discussed.
The most notable event will be held on 20 – 22 March 2019, taking place at The Westin Resort Nusa Dua, Bali.
For more information about BATIC 2019, including details of registration and partnership, please visit https://batic.events or contact registration@batic.events