Cryptocurrencies . 13 Dec 2021

Blockchain Technology in Telecom Sector

by Blockonomist Editorial
Blockchain Technology in Telecom Sector
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Recently Vodafone Idea (VI) has partnered with Tanla Platforms, a cloud communications company, to encrypt its international messaging traffic on the Vi network using blockchain technology. This partnership will be hosted on Tanla's cloud-based platform called 'Wisely' co-developed with the help of Microsoft, strengthening the global marketplace of both enterprises. 

What is blockchain technology? 

Blockchain is an unchangeable ledger for recording transactions, tracking assets and building trust. Blockchain technology is a solution to centralization; it's a system for keeping records by everybody without the need for a central authority. Blockchain technology is an innovative way to implement decentralization. 

There are mainly four elements required for the implementation of blockchain technology. 

  • The first important thing required to support a blockchain is a peer-to-peer network ( a network of computers also known as nodes).
  • The second thing is cryptography; it is the art of secure communication in a hostile environment.
  • The third element is a consensus algorithm(for example, Bitcoin uses a proof-of-work algorithm).
  • The fourth element is punishment and reward for people who always follow the rules.

Telecom sector and blockchain technology 

Blockchain technology is building a digital society; convergence of blockchain technologies and distributed ledger, smart tokens, physical and real-time data through IoT will redefine the DeFi sectors in ways we have never imagined. Currently, we are moving towards the fourth digital revolution, which will be a merger of five or six kinds of technology digitizing billions of lives. Blockchain is expected to provide benefits to the telecom and CSP industry in the form of cost simplified savings, simplified processes, improved collaboration, new revenue streams, and real-time transparency. Besides these, blockchain technology is also expected to help resolve industry challenges, including concerns about digital identity, data privacy, delay in dispute resolution, maintenance of complex agreements, and GDPR and roaming fraud, among others.

There are three primary use cases where blockchain technology can add value in the Telecom sector: 

  • Roaming and Settlements: Currently, there are intermediaries to handle roaming partner settlements and timelines to resolve any issue, which can take months, including human errors, frauds, lack of transparency and most importantly, a poor customer experience. Smart contracts on blockchain technology can reduce the role of intermediaries by automating the SLA agreements, leading to cost savings, reduction in roaming frauds and instant settlements.
  • Identity Management: Today, processes like Know Your Customer (KYC) are handled by third-party agents, which sometimes leads to misuse and leakage risks. Blockchain technology provides decentralized storage of these documents, which can only be controlled by the individual sharing the documents.
  • Prevention of Phone Theft : Today, Telecom operators have limited capabilities to detect a stolen device. With blockchain technology, TSPs can store unique device/SIM data on the blockchain along with customer profiles. In case of a stolen device, telecom operators can block a stolen device instantaneously.

With the emerging 5G industry, uses of blockchain technology in the telecom sector are widespread, which includes payments through mobile wallets with blockchain, device identity and security management as more IoT and edge devices enter the network and many more.