Blockchain could boost the telecoms sector by up to $1 billion in the coming years – but to do that telcos need to build new capabilities, according to the latest note from GlobalData.
The verdict from the digital media provider, which notes that several major operators are undergoing initiatives, is that blockchain-enabled communications to mobile SIM cards could help solve the roaming problem.
“Through blockchain-enabled direct communications to mobile device SIM cards, mobile operators would love to offer their voice and data services to international travellers visiting in their coverage areas,” said Ron Westfall, technology analyst at GlobalData. “The operators benefit by accessing a vast new customer base of travellers while also avoiding costly integration into third-party systems or spending heavily on upgrading inflexible legacy systems as well as building new complex systems.”
GlobalData notes that among the largest operators, BT, Colt, HGC Global, Telefonica and Telstra are currently trialling blockchain technologies. As this publication reported back in March, Colt announced a proof of concept to assess whether blockchain could help solve the problem of payment settlements between operators.
Yet, like when the hype of cloud computing and the Internet of Things had previously arrived, telcos need greater technical know-how and marketing sophistication with blockchain.
“Telcos must show they can use these ongoing blockchain trials to quickly deliver new services and features,” added Westfall. “They need to hire and train personnel that understand blockchain technology and adapt their networks to take advantage of distributed ledger capabilities.
“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 blockchain0powered, fully trusted and streamlined communications and transactions,” said Westfall.
The billion-dollar figure came from a report by Markets and Markets published last month, with the analyst firm expecting the market size to be $993.8 million by 2023 at a CAGR of 84.4% during the forecast period.
Writing for this publication in November, Ericsson’s Rajat Kochhar noted fraud management, IoT/M2M connectivity and identity management as the key use cases. “These use cases provide plenty of ways that telcos can invest in the development and implementation of blockchain-based products,” wrote Kochhar. “It is expected that within the next few years, the use of blockchain technology by the telecommunications industry will become more widespread and eventually become the norm in services like identity management, and registries to start with.”
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