The future of blockchain in telecoms: Standardisation and disruption
Since its introduction over a decade ago, blockchain has become one of the most talked about technological developments in years, with organisations across all industries considering the impact it might have on their business. While its technological capabilities continue to evolve, however, Gartner believes it is not yet capable of justifying the hype in terms of mission-critical use within the enterprise. But this note of caution doesn’t appear to have affected the optimism of the business community. According to a recent survey by Tata, more than two in five organisations have already adopted blockchain technologies.
Some analysts predict the value of blockchain deployment in the telecoms sector alone could reach almost $1 billion by 2023. Indeed, the sector has already seen significant investments in the technology. According to a report by IBM, for example, more than a third of CSPs are either considering or are already engaged with blockchain. What’s more, several big players including Telstra, Orange and Verizon have invested in blockchain-related projects, prototypes and frameworks, while others, including BT and AT&T, have filed patents regarding the application of blockchain technology in telecoms.
Emerging use cases
The organisations mentioned above, along with others within the wider ecosystem, are embracing the fundamental capability of blockchain to offer transparency and immutability of data, which makes it ideal for use in cases where information sharing, visibility and trust are of paramount importance. Serious consideration is therefore being given as to how it can be applied to use cases involving multiple parties, in which information transparency is needed, or in which there is limited trust, requiring transactions to be recorded as digital contracts between each party. Examples of such emerging use cases include the need for supply chain visibility, asset tracking, digital twins, record management, and the increasing emergence of distributed apps (Dapps).
Blockchain’s information-sharing capabilities are advantageous too, in enabling operators to improve their efficiencies and time-to-market. The hand-off of deliverables from one party to another, for example, while ensuring their quality and adherence to a schedule, is one example of the efficiency benefits that blockchain can offer operators. Digitising information hand-offs on a blockchain platform can help to optimise processes in the product development cycle - Dapps will automate the running of those processes, while smart contracts will manage how the data is stored on the blockchain.
Despite the obvious potential that blockchain holds for the telecom industry, and the significant level of interest that’s already been shown in engaging with the technology, barriers to its adoption still exist.
Gartner’s comment, for example, that the hype might still outweigh the reality, was echoed by the GSMA in its report ‘Blockchain – Operator Opportunities’ which points out that ‘actual realised technologies are still limited and the technology still has to be proven.’ Indeed, discussions around blockchain at last year’s Mobile World Congress were more concerned with what the technology could offer, rather than demonstrating its application in any concrete use cases. If the investments made in blockchain are to deliver a return, therefore, the hope is that this year’s event will see evidence of how the technology has since been executed and its effectiveness measured.
Another significant barrier to its widespread adoption is the current lack of standardisation and interoperability. A recent study by Deloitte, for example, revealed that the cloud-based repository GitHub featured more than 6,500 active blockchain projects, written in different coding languages, and using various different platforms, multiple protocols, consensus mechanisms, and privacy measures.
Fortunately, it appears that efforts towards addressing this issue are well underway. At the time of writing, Hyperledger, a cross-industry collaborative blockchain initiative, boasted more than 260 members, including Cisco, IBM, and SAP. Another consortium, the Enterprise Ethereum Alliance (EEA), which is focused on developing a set of global open-source, standards-based blockchain specifications, had more than 500 members, including Microsoft, JPMorgan and Accenture.
The number of blockchain consortia is increasing. According to Gartner the number grew from 27 in 2017 to more than 60 in 2018. And at least one of these, the Carrier Blockchain Study Group (CBSG), was formed with the explicit aim of enabling and encouraging the joint development of telecom blockchain initiatives.
Time for disruption
Once a more standardised blockchain platform becomes more widely adopted as a service, it will become easier for operators to realise its value.
As operators become more comfortable with blockchain, and more confident in its application, so their focus will likely turn toward a greater use of Dapps as a secure means to interfacing and integrating with other organisations. By enabling greater interoperability in this way, eliminating the need for both expensive infrastructure and intermediaries, blockchain will deliver a quicker, more efficient and cost-effective means of transmitting information, representing both new opportunities and new forms of revenue for operators.
Blockchain is set to disrupt industries everywhere. The barriers are coming down. And when they do, it will be the turn of the telecoms industry.
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