& cplSiteName &

A Clear Path to Blockchain in Telecom

Scott Raynovich

Blockchain in telecom is a powerful concept and the hype is somewhat justified, if only because it can generate a fantasy of rendering large swaths of the lawyers, bankers and OSS vendors as unnecessary. What could be better? A blockchain system could do this by establishing the trust imparted by third-party services.

There are, of course, many barriers to blockchain technology. These include the perceived lack of maturity as well as the difficulty in selling the technology of crypto-hobbyists into large enterprises. Service providers, slower moving than even large enterprises, usually aren't the first end market that comes to mind.

But Clear Blockchain Technologies, based in Singapore, thinks it has an approach that works. This involves building private blockchains that can help speed the automation of one of the trickiest areas in the field, inter-carrier settlement. Clear is also targeting using blockchain-based automation in billing and OSS software.

"Telcos are at an inflection point," says Gal Hochberg, co-founder and CEO of Clear Blockchain Technologies. "There is an exponential need for data and telcos need to deliver new things but their ability to deliver value is limited. We can enable new services using blockchain."

Hochberg pointed out that the telcos, in order to compete with cloud, need to speed up their inter-carrier agreement process, which is still largely manual. Clear's private blockchain technology is running on an Ethereum-based network for its current proof-of-concept, but the company supports a variety of distributed ledger technologies. The technology targets "smart contracts" which can be built in code that is automatically executed as services are fulfilled.

Hochberg believes the service-provider market may not be ready for the public blockchain, so it has built a distributed ledger on a private one. He believes that someday large corporate entities will be more comfortable with public blockchains, which he likens to using the Internet, but for now there is more safety and control in the use of a private blockchain.

Those new services would include things like bandwidth-on-demand services for things like virtual reality and augmented reality, says Hochberg. Or it could be as simple as using the blockchain to automate inter-carrier Ethernet links targeting the enterprise.

Of all the potential areas, inter-carrier contracts seem like the the areas most ripe for benefit. Global service providers have the reputation for being painfully slow in adopting innovation. But if there's any areas ready to change, it's communications contracts such as those for MPLS or private-line Ethernet, which can famously take months to complete.

Distributed ledger and bitcoin technology has already found real world use cases. These include tracking shipping assets, as implemented in a larger partnership between IBM and Maersk. It has many other applications in vertical markets because its promise to automate trusted transactions and verify data. Think of verifying and tracking drugs in the pharmaceutical industry.

Telecom has many characteristics that make it a likely home for blockchain. There are large numbers of third-party agreements. Communications sessions are transactions that often require a complex settlement process. If you think of blockchains and distributed ledgers as a secure, automated records of transaction data, this could be the place, as the Talking Heads once sang.

Heavy Reading's own James Crawshaw recently pointed out the opportunities for blockchain telecom include:

Fraud prevention: If blockchain-based security were to lead to a halving of fraud, this would save the telecom industry $19 billion annually, or 1.8 percent of total revenue. Network Security: We see this as a risk-mitigation opportunity, not a cost-saving or new-revenue opportunity for CSPs.

Identity: Here we see a potential new revenue stream for CSPs as trusted entities providing identity management as a service (IDaaS).

Settlement: If mobile roaming settlement was to migrate to a lower-cost, blockchain-based alternative to existing systems, it might save the global mobile industry $650 million annually, or 0.04 percent of total revenue.

Mobile payments: Blockchain could play a role in mobile payments as an alternative to established intermediaries.

Clear is working with the MEF , which also has its eye on blockchain. There will be an upcoming blockchain Proof of Concept (POC) at the MEF conference in November in Los Angeles. MEF is looking to accelerate inter-carrier automation with Application Programming Interfaces (APIs) known as LSO Cantata and Sonata.

MEF CTO Pascal Menezes says the potential is real, with trials already underway. "Blockchain is real, trials are happening and it's being used commercial settlements," Menezes told me in an interview. "It’s not pie in the sky."

Menezes says blockchain technology has the right attributes to help automate billing in during settlement. It also has the potential to help with security and identity.

"It's a distributed general ledger, so it's the perfect technology [for carrier settlement]," says Menezes. "It's designed to settle on currencies."

The potential has certainly gotten the attention of some telcos, with some major ones already making moves.

Colt and PCCW, for example, are working on a trial to help automate international carrier settlements. (See Colt Ramps Its Blockchain Efforts, Explores SDN Federation Use Case.)

Japanese giant NTT, meanwhile, has filed for a patent to use blockchain technology for smart contracts, described as "methods, systems, and devices for leaving evidence of a contract on a blockchain with a simple method while having agreements made among the involved parties, maintaining the mode of one electronic signature per transaction, and maintaining credibility."

While the industry has targeted many potential use cases for blockchain in telecom, I believe that Clear and the MEF are correct to target carrier billing and settlement processes. Intercarrier agreements and billing are the most painful technology areas in telecom, and those areas seem to slow carriers from entering new markets as quickly as younger, newer cloud providers. Any progress to update an antiquated BSS/OSS settlement and orchestration process would be a breath of fresh air for the industry.

— Scott Raynovich, Founder and Principal Analyst, Futuriom

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Beer
9/15/2018 | 3:45:25 AM
Re: New kid on the block
Polygravity runs on a propretary (private) network called the Persistent Socket Datagram Protocol [PSDP]. The PSDP is a decentralised transaction system, fielding a system design which:
  • Has the ability to execute "smart contracts" automatically as services are fulfilled.
  • Is limitlessly scalable and thus, is able to process an unlimited amount of transactions simultaneously.
  • Does not require users to use crypto-tokens to interact with the system.
  • Executes all transactions on the network in real-time.

Of course it is easy to claim this without much proof. Their technical white paper release is due at the end of September. They have a sign-up that promises to send you the paper once it is released (here). But I am sure the people at Unitymedia have had a proper look at it before they entered an official partnerhip. 
User Rank: Light Beer
9/14/2018 | 5:16:41 AM
New kid on the block
Polygravity just made their entrance into the TelCo space with a very similar concept and a strong partnership: https://www.linkedin.com/pulse/we-excited-announce-our-partnership-unitymedia-marc-wyss/
User Rank: Blogger
9/4/2018 | 1:18:20 PM
Lawyers, bankers and OSS vendors
We all begrudge the sums earned by lawyers and bankers operating at the top of industry food chains such as telecoms (not to mention management consultants and advertising executives) but OSS vendors? They are not exactly taking it in as far as I can tell. Take a look at Nokia and Ericsson financials ...
More Blogs from Column
AI-driven solutions are being used in telecommunications to support various elements of the customer experience that most CRM systems just can't handle.
By 2021, telecom networks will see a turning point where AI-driven technologies will be necessary to deploy, run and manage 5G services and leverage comprehensive network automation solutions.
The US could start a steady climb back up the global rankings if more cities practice intensive spectrum management and make new LTE-Advanced upgrades.
Operators will need full control over network and application performance if 5G services are to thrive.
Featured Video
Flash Poll
From The Founder
After almost two decades at Light Reading, it's time for a different optical adventure.
Upcoming Live Events
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 6, 2018, London, United Kingdom
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
March 12-14, 2019, Denver, Colorado
All Upcoming Live Events
Hot Topics
Apple: It's the End of the SIM as We Know It
Iain Morris, International Editor, 9/13/2018
MWCA Day 2 Recap: '5G' Rolls Out & We Roll On
Phil Harvey, US News Editor, 9/14/2018
The Mobile Network Is Becoming a Cloud Service
Phil Harvey, US News Editor, 9/18/2018
MWCA Day 1 Recap: 5G Is Here…?
Phil Harvey, US News Editor, 9/13/2018
So Long, & Good Luck With That
Steve Saunders, Founder, Light Reading, 9/14/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Partner Perspectives - content from our sponsors
One Size Doesn't Fit All – Another Look at Automation for 5G
By Stawan Kadepurkar, Business Head & EVP, Hi-Tech, L&T Technology Services
Prepare Now for the 5G Monetization Opportunity
By Yathish Nagavalli, Chief Enterprise Architect, Huawei Software
Huawei Mobile Money: Improving Lives and Accelerating Economic Growth
By Ian Martin Ravenscroft, Vice President of BSS Solutions, Huawei
Dealer Agent Cloud – Empower Your Dealer & Agent to Excel
By Natalie Dorothy Scopelitis, Director of Digital Transformation, Huawei Software
All Partner Perspectives