Cheap roaming and other ways telcos could use blockchain

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As the use of blockchain technology becomes increasingly widespread, how can telecoms companies benefit? ITU News spoke with Oleg Pravdin, managing director of Blockchain in Telecom, about the potential uses of blockchain for the telecoms industry.

How can telecom companies take advantage of blockchain?

Oleg Pravdin, managing director of Blockchain in Telecom
Oleg Pravdin, managing director of Blockchain in Telecom

Oleg Pravdin: Our team is developing a decentralized system of equal participants that will allow even the smallest mobile operators to get access to the global telecommunication services market. Small operators will be able to provide services at the same level as large operators, and large operators will be able to expand their client bases.

Moreover, the system implies the absence of any intermediaries or commissions when making mutual settlement of payments. Therefore, telecom companies will be able to increase their revenue without making any investments.

What are some examples of opportunities realized through blockchain?

Here is how it works: mobile operators publish their own offers as smart contracts. These offers are available to all other operators. Home operators choose offers that they would like to provide their subscribers with. They also have total control over these offers and determine prices in local currencies for subscribers.

A subscriber chooses the most suitable offer and pays for it. By selecting the offer, a new “request” smart contract is created, with the digital identity of the subscriber and payment transaction going with it. The user’s money is transferred to the home operator and the visited operator – the one whose service package they purchased.

The offer issuer, i.e. the visited operator, identifies the user, receives the money and starts servicing the subscriber directly at the local price with high quality. In addition, the subscriber uses their existing SIM card while traveling abroad.

Thanks to blockchain technology, operators can interact with each other as equal partners, and the concurrence procedure between operators is greatly simplified. All calculations between them are made using SDR tokens, which are tied to a basket of five currencies, and performed instantly.

Therefore, blockсhain allows us to leave expensive roaming agreements behind.

What are the benefits of blockchain for development in emerging markets?

Blockchain can be used in any market – it will incorporate seamlessly and be beneficial, regardless of whether it’s a traditional market or an emerging one with an underdeveloped telecommunications infrastructure. Moreover, this technology can be adapted to any market segment – blockchain opens for us the opportunity to cover markets that were simply impossible to cover before.

Let me outline a brief example. Packages provided by various mobile operators can now incorporate hotel, taxi and food-ordering services. Service packages displayed in the blockchain can include almost anything we think is worth adding.

Of course, the users may not actually use all of the offered services, but the prices will be appealing, so the packages will sell successfully. At the same time, creation of such extended packages does not entail any additional administrative costs.

What are the barriers?

I would like to outline three obstacles. First, blockchain technology is a completely new technology. As it often happens, implementation of new technologies involves a number of obstacles since it’s really hard for the conservative part of the society to perceive and adopt innovative solutions. New technologies can cause distrust and even scare people.

Second, there is a certain obstacle related to the issue of privacy. As blockchain implies total transparency, it means that if a part of the information exchange between the participants needs to be hidden from other participants, then additional efforts have to be made.

Third, there is a need for legal regulation of the blockchain. Unfortunately, the blockchain regulation requires a very non-standard approach because otherwise it will lead to a number of misunderstandings. Meanwhile, regulators of various countries do not hurry to come up with the necessary approach.

Moving forward, what is the broader potential of blockchain?

Blockchain technology will not only allow us to revolutionize the telecommunications industry, but also to conduct a global integration of telecommunications, hotel, transportation, restaurant and many other types of businesses as well as bring clarity and transparency to mutual settlements of the system’s participants. The ecosystem that we are developing has almost unlimited potential.

The original version of this article first appeared in ITU News

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