As telcos continue to struggle across the board with dwindling revenue and profitability, blockchain is being billed as the next $1 billion opportunity. However, they must adapt their networks and train personnel to take advantage of blockchain capabilities, ranging from the elimination of hated roaming fees to accelerating the broad availability of connected device services like drone deliveries, says leading data and analytics company GlobalData.
Of late, blockchain is generating many headlines, mostly related to cryptocurrencies like Bitcoin and the prospect of a new paradigm for fully secure transactions.
Market projections point to a billion dollar telco blockchain market in the next five years. Looking ahead, consulting stalwart Accenture sees the potential for a $1 trillion global telco blockchain ecosystem.
Even with the wide variance in market forecasts, there is a broad industry consensus that blockchain will grow significantly and play a powerful role in transforming the telco business model and overall industry.
Operators on a global scale are gearing up to capitalize on a variety of blockchain capabilities. Several of them are far along in testing blockchain to address immediate opportunities such as eliminating widely loathed roaming fees.
WANT TO BUILD A FINANCIAL EMPIRE?
Subscribe to the Global Banking & Finance Review Newsletter for FREE Get Access to Exclusive Reports to Save Time & Money
By using this form you agree with the storage and handling of your data by this website. We Will Not Spam, Rent, or Sell Your Information.
Major operators such as BT, Colt, HGC Global, Telefonica and Telstra are already engaged in a high-profile blockchain trial aimed at accelerating the settlement process of their wholesale services. Verizon is financially backing blockchain specialist Filament with the goal of using blockchain to ease the use and payment of connected device services such as drone-based deliveries and monitoring.
Ron Westfall, Technology Analyst at GlobalData, says: “Through blockchain-enabled direct communications to mobile device SIM cards, mobile operators would love to offer their voice and data services to international travelers visiting in their coverage areas. The operators benefit by accessing a vast new customer base of travelers while also avoiding costly integration into third-party systems or spending heavily on upgrading inflexible legacy systems as well as building new complex systems.”
However, operators have traditionally struggled to sell anything beyond voice minutes and data bytes. Blockchain requires a level of technical know-how and marketing sophistication that will not come overnight.
Westfall concludes: “Telcos must show they can use these ongoing blockchain trials to quickly deliver new services and features. They need to hire and train personnel that understand blockchain technology and adapt their networks to take advantage of distributed ledger capabilities. The evidence indicates some operators will be ready to use blockchain-enabled capabilities like initiating the widespread elimination of roaming fees toward the end of 2018. Longer term, and if done correctly, the ramifications for the telecom market are immense, as operators as well as their customers and partners stand to gain significant customer experience and financial gains from blockchain-powered, fully trusted and streamlined communications and transactions.”