Colt, often at the vanguard of new technology deployments, has invested considerable time and effort during the past year in figuring out how blockchain technology can help boost operational efficiencies, improve customer experience and open up new revenue opportunities. And now it's looking at how the distributed ledger technology, best known for underpinning cryptocurrencies such as Bitcoin, could make SDN interoperability easier to manage.

The operator, which has been amongst the leading pack of Carrier Ethernet, SDN and NFV exponents over the years, announced in March this year that it was working on a proof of concept (PoC) with fellow operator PCCW Global and Clear, which develops blockchain-based settlement and clearing systems for enterprises based on Ethereum, an open source blockchain-based platform that features smart contract functionality.

The PoC focused on how blockchain could be used to automate the inter-carrier settlement of international wholesale services and, as the PoC developed from using historical data to the ingestion of live data feeds, it quickly attracted attention and involvement from other operators, including BT Group plc (NYSE: BT; London: BTA), Hutchison Global Communications Ltd. (HGC) , Telefónica SA (NYSE: TEF) and Telstra Global . (See PCCW Global, Colt Expand Blockchain Trial.)

Inter-carrier settlement was a good place to start with telco blockchain as it met the key criteria for the use of distributed ledger technology (DLT), notes Mirko Voltolini, Head of Network on Demand at Colt Technology Services Group Ltd , who notes that blockchain should only be used where appropriate.

"Blockchain is a database and could be used for many things, but if you don't need the particular attributes of a distributed ledger technology platform -- such as distributed trust -- then you're better off using a regular database," notes Voltolini.

"The carrier environment is one that requires a great deal of cooperation, with multiple carriers buying from and selling to each other, and that requires settlement. Anything that involves multiple operators and that requires trust between the operators and which is done manually, such as settlements for wholesale voice traffic, then you can do it using blockchain," he adds.

Figure 1: Colt's Mirko Voltolini: "Anything that involves multiple operators and that requires trust between the operators and which is done manually, such as settlements for wholesale voice traffic, then you can do it using blockchain."

So what is the status of the settlement PoC? Louisa Gregory, chief of staff who is responsible for strategic execution at the operator, says Colt is "working with Clear and the other carriers to check what is possible," and that can take time as each operator has its own security and legal teams that need to be involved and make their own checks.

The operators involved will take further steps at the next ITW Global Leaders' Forum (GLF) meeting in October, says Gregory. "There is a GLF working group deciding what might happen with a resulting solution -- there has been no decision yet. The steps being taken with the GLF start with bilateral, then move to multi-lateral and then an industry-wide solution under the GLF for voice settlements in the 2019-2020 timeframe. Members are keen to ensure it works across multiple carriers," she notes.

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Improving SDN federation
Colt isn't stopping at wholesale settlements. "Another trial that is in the design phase is one that could help augment SDN federation," says Voltolini. "We have been working with the MEF on SDN interconnect and now we are looking at how the process of engaging with interconnect partners, related to quoting, delivery and so on, might be complemented by the use of blockchain. About 90% of setting up such a relationship with another operator is standardized so it could be encoded in a smart contract," says the Colt man.

That's the "front end" of SDN interconnect, getting the relationship set up: The "back end" would be handled by the Sonata interface developed by the MEF. "That doesn't need a blockchain -- it already has a better Web-based API," notes Voltolini, and it's one that's already been used in a cross-carrier automation demo laid on by Colt and Verizon. (See Colt, Verizon Take Giant Leap for Cross-Carrier Automation and Carriers Demo MEF's Sonata SDK for LSO .)

That "front end" is something that Colt is working on with Zeetta Networks Ltd. , which has a "patent on the high-level idea," says Voltolini, who adds that Colt hopes to have something to show around this by the end of the year.

That's definitely something to discuss when blockchain as a tool to enable automation in telecoms is discussed during a panel session at Light Reading's Software-Defined Operations & the Autonomous Network event in London, November 7-8. That panel session includes speakers from Colt, PCCW Global and Telefónica, so it should be a doozy!

Additional applications
Blockchain also looks like a useful technology in the back office too, reckons the Colt team.

Voltolini believes it could be very useful "in the KYC [know your customer] process. Onboarding a customer requires credit checks, lots of manual checks. Imagine how much of that could be automated," he observes.

Also, Gregory notes that there are multiple functions where trust and security are implicit, such as in human resources, and where blockchains could play a role. "Imagine what you could do with CV [résumé] submissions" from job applicants. "Data could be held on a blockchain and it can be trusted. It would reduce the verification process," she notes.

This looks like only the tip of the blockchain iceberg for telcos: As Heavy Reading senior analyst James Crawshaw noted recently, about a third of telcos are already considering or are actively engaged in blockchain-related activities, much of it related to security applications. (See Separating Blockchain Hype From Reality and A Clear Path to Blockchain in Telecom.)

By the end of the year, that figure and the spread of potential use cases is likely to be much greater, as Colt's efforts already indicate.

— Ray Le Maistre, Editor-in-Chief, Light Reading