Telefónica and Deutsche Telekom are among the investors that participated in a $13 million Series A round of venture funding into Israel-based startup Clear, which is working to apply blockchain technology to the global telecom industry.
The company's goal is to use blockchain to eliminate, or at least reduce, the expenses surrounding financial interactions between international telecom operators. For example, when a mobile customer roams from their home wireless network onto a network of another operator, those two operators typically must apply significant infrastructure and banking operations toward settling the financial details of that roaming event.
Blockchain -- essentially a secure, shared and decentralized ledger -- can potentially cut down the complexity and cost around such wide-scale transactions.
Moreover, blockchain technology can be applied to a wide range of services within the telecom sector beyond just roaming. Customer identity management, authentication and IoT monitoring and tracking are just a few of the other areas that have been discussed by industry players as areas that blockchain could improve.
That's clearly what's driving telco interest in Clear. Fintech investment firm Eight Roads led the investment round into the startup, with participation from Telefónica Innovation Ventures, Telekom Innovation Pool of Deutsche Telekom, HKT and Singtel Innov8. Company executives told TechCrunch that the cash should allow Clear to develop carrier-grade production of its offering by the first half of this year.
"We are very excited about Deutsche Telekom's investment in Clear, a leading specialist in new billing and settlement systems," said Federico Homberg, head of roaming business development and innovation at Deutsche Telekom Global Carrier, in a release from Clear. "Inter-Carrier billing and settlement is complex and often has manual steps. Complexity in the inter-carrier world is increasing with the advent of new communications technologies such as NB-IoT, LTE-M, VoLTE. Smart Contracts and distributed ledger technology will simplify and automate billing as well as settlement and flexibly support new kinds of communications needed by our customers."
Clear is no stranger to the blockchain trend in the telecom industry. Indeed, it was highlighted in a lengthy Light Reading article published in 2018. That's partly because Clear handled the blockchain technology in a 2018 proof of concept effort headed by Colt Technology Services and PCCW Global to reduce inter-carrier settlement time from hundreds of hours to less than a minute. BT, HGC Global Communications, Telefónica and Telstra subsequently joined the effort.
But these companies are by no means alone in eyeing the potential of blockchain technology in the telecom space.
Other startups that have discussed the opportunity include TBCASoft, Bubbletone, Swirlds, Filament, Mobileum and others. Perhaps more importantly, larger telecom-focused billing and settlement companies like CSG and Synchronoss Technologies have also invested in the space.
Driving this interest in blockchain are the operators themselves. Indeed, examples of major wireless network operators around the globe wading into blockchain services are extensive:
- Verizon, for instance, is working with Guardtime to sell blockchain as a service to its enterprise customers.
- LG Uplus, Etisalat Group, KT, Telefónica and PLDT created the Carrier Blockchain Study Group to develop a blockchain platform for telcos.
- Indian operator Jio launched its startup accelerator Jio-GenNext in part to spur blockchain-related developments.
- T-Mobile said it has been working with Intel on a blockchain database for internal use.
- AT&T said it has been working on a blockchain to handle things like handset returns and upgrades, among other activities. And, like Verizon, AT&T is also selling blockchain offerings to enterprises via partnerships with IBM and Microsoft.
"Many executives -- including those in telecom, media, and entertainment (TM&E) businesses -- seem to already grasp blockchain's real-world potential to advance strategic objectives and, perhaps, to lay the foundation for a truly networked digital economy," wrote a group of Deloitte analysts in a lengthy post on the topic in 2018.
However, it's worth noting that Deloitte has been discussing the telco blockchain opportunity since 2016.