5 Major Blockchain Impact on Telecom Industry: Blockchain Use Cases

Aug 26, 2021
4 min read

Blockchain technology is one of the most ambitious technologies in the world. It is impacting many industries, including telecommunication which has a vast customer base and internal activities. You might be wondering what Blockchain actually is and how it will impact the telecommunication industry. So, in this post, we will discuss the same and other key terms, so keep scrolling down.

Blockchain Use Cases

What is Blockchain?

Blockchain is the technology or the system to record information to make it complex to change, duplicate or hack the data. It is a digital ledger of digital transactions copied and delivered to all over the network of the advanced computer structure of Blockchain. Here each block keeps the number of transactions, and every transaction takes place on the Blockchain. It is also recognized as Distributed Ledger Technology or DTL because many participants manage this platform. Blockchain can be explained as tangible or intangible assets.

Pain Points and How Blockchain Can Be An Ideal Solution


5G Enablement

Telecommunication companies are complex, and they all require a significant amount of infrastructure and colossal investment to complete their projects. Now, the 4G/LTE network is undergoing, and soon the world will have a 5G network with a 10x faster speed. This network will also have lower latency and an enhanced capacity to manage the complex network, requiring advanced calculation and a large storage capacity.

IoT Connectivity

In the next decade, IoT cellular connectivity will cross billions of connections. It will face significant issues of data security and an increased number of IoT devices. Therefore, IoT connectivity also faces several challenges like securing the interactions and sensitive data among the various devices and sensors. Also, it increases the cost to grow the security features in such devices. However, the blockchain-based system for IoT security is more scalable. It does not allow validation to the rogue device and offers advanced security features.

Fraud Management

The telecommunication industry also faces a massive number of fraudulent schemes or offers every year. According to the CFCA, fraudulent activities cause 38.1 billion dollars lost every year. Therefore, it impacts the revenue of the telecom sector as well. It has mainly two types of fraud such as roaming fraud and subscription identity fraud.

Roaming Fraud

Roaming fraud is telecommunication fraud where the subscriber gets access to HPMN or Home Public Mobile Network resources by the VPMN or Visited Public Mobile Network. In contrast, the HPMN cannot charge for the services from the subscriber and is still obligated to pay the VPNM for the roaming expenses or services. But it can be prevented by implementing blockchain technology between the operators.

And both parties verify every transaction whenever the user makes some purchase or uses any service. With the help of Blockchain's smart contract, the HPMN and VPMN can make mutually agreed agreements. So, when this agreement is implemented, then there will be a significant reduction in telecom fraud.

Identity-as-a-Service

Many telecommunication companies or solution providers are looking forward to the identity-as-a-service solution offered by blockchain technology. Blockchains this solution encourages the self-sovereign movement and identity. Also, it helps companies manage their customer's digital identities easier and helps customers get back control of the information they produce digitally. Because the improper management of customers' digital identity can misuse and convert into scandals like Cambridge Analytica.

Benefits of Using Blockchain for the CSPs

Extremely Complex Framework

Blockchain is a technology that is highly complex to understand. Therefore, the transactions are impossible to duplicate, alter or hack. With the help of this, the Communications Service Providers (CSPs) can keep their customer's identification details securely.

Enhanced Efficiency

When CSPs start offering their services using blockchain technologies, they will securely streamline multi-party transactions. It will be running these transactions by automatizing and expediting the complete transaction, ensuring higher accuracy. When the customer needs to pay for the services offered by CSPs, Blockchain will verify the low-value transactions, encouraging transparency for the customers. Also, it can help perform multiple-party transactions efficiently and more securely.

Cost Reduction

CSPs can also reduce the cost involved in their projects because they can decline the intermediaries. It also automatizes the process, which reduces labor-intensive work. The telecommunication industry performs several labor-intensive tasks, such as the verification of transactions. But after using blockchain-based technology, this task will automatically get completed and reduce the involvement of the middle man.

Fraud Reduction

CSPs also face around 38 billion losses every year through fraudulent activities. But it can be prevented if blockchain technology comes into use as it validates every transaction and ensures higher accuracy. It will be able to operate the dispute among all the operators efficiently. Along with that, it has the potential to reduce roaming and subscription-based frauds.

Challenges of Using Blockchain for CSPs

Low Adoption Rate

A few organizations have opted for this technology, but most organizations are still running their business activities on traditional technology. As per the report of APQC, around 29% of companies are shifting or have completely shifted to this technology. But still, around 71% of companies understand this platform to know more about scalability and effectiveness.

Lack of Trust Among the Users

The other challenge of implementing blockchain-based technology for the telecommunication industry is that users lack trust in it. And even many organizations may not feel comfortable ultimately opting for the technology as these organizations may not trust the other users or the parties on the Blockchain. However, every transaction on this platform is considered secure, validated, and secure, but still, there are no central authorities to validate these transactions.

Blockchain Solutions Need to be More Mature

Blockchain vendor platforms have been successfully working for many years, and there are many marketplaces where such transactions are valid. However, it is still in initial mode when compared to the demand and need of various CSPs. It needs to be more mature among the other industries and the most important among the users.

Conclusion

Blockchain is the technology of the future that can significantly contribute to the growth of the telecommunication industry. It can reduce fraud, ensure security to customers' data, and generate an additional source of income for the telecoms industries. Nevertheless, Blockchain needs to be more mature and advanced to meet the needs of telecom industries to contribute an integral part in setting up 5G network and other futuristic projects.