Blockchain in Telecom: Use cases
New technologies based in blockchains seem to be called to disrupt almost every economic sector –creating new business opportunities, lowering costs or even changing the relationship between companies and users. Nowadays, it’s clear that blockchains may bring several benefits, but it’s also evident that its implementation entails various challenges.
Telcos are already working on the development of blockchain-based applications. Companies such as Verizon and Orange have invested in startups focused on this area, while others are dedicating significant resources to in-house research. Let’s take a look to some use cases of blockchain in Telecom.
Enabling roaming calls through different networks and operators is an old problem. Current solutions are based on complicated and expensive systems, involving third parties. Also, existing systems have security flaws, and roaming estimated fraud reaches billions of dollars.
Blockchain can solve this problem by enabling complex datasets across multiple operators, in real time and with a high level of trust, especially on the verification of the subscriber’s identity.
Identity verification & management
Traditionally, a subscriber’s identity relays on their phone’s SIM card. However, this method is not reliable, and false identification leads to big amounts of fraud –for example, fraudsters may collect someone’s data using phishing or any other method and get a SIM card at his/her name.
By using blockchain technology, the subscriber’s identity would not need to be attached to a SIM card but could be stored on a secure blockchain, linked to each one of their devices through a system of public/private key –the kind of encryption that lays in the core of blockchain.
Such a trustful identification system based on virtual SIMs will not only reduce the costs of fraud dramatically –and the charges of fabricating and distributing physical SIM cards– but will also open to telcos to new business opportunities. Like for instance, having a highly reliable identity verification system, telcos may want create partnerships and agreements with other businesses and organizations that also need a robust verification method –i.e., online stores, educational centers or hospitals.
Smart connection - IoT & 5G
To take advantage of everything promised by 5G connections and IoT, users will need ubiquitous access to the net, which they will only get jumping across several networks and different connection nodes. Telcos will have to handle all those connections and assure users the fastest and most reliable connection. The adoption of a unique and centralized blockchain can help to provide multiple connections through different nodes and, using smart contracts; a blockchain-based system may also manage the terms and conditions under each device can connect to each node.
The benefits of implementing a blockchain are plenty in both, current and potential services. Nevertheless, the adoption of new technology is never exempt from challenges. For example, as a blockchain keeps all the historical data, its size may become unsustainable –several companies are already working on an alternative to this problem. Also, the introduction of new technology is always complicated, and it may rise unforeseen difficulties in the first moments. Not to talk about that a new regulatory framework may be required to implement smart contracts and identity issues.
However, none of these challenges seems to be hard enough to overcome the multiple benefits of adopting blockchain. And, according to the Blockchain Council [blockchain-council-org] the use of blockchain technology by the telco industry will prevail in the next few years and may eventually become the norm.