After immense investment in blockchain projects, some of the most profound applications of blockchain yet again began appearing last year – the entire industry was excited about the potential applications of this technology.
In particular for the mobile industry, blockchain was the talk of the town. With the explosion in connected networks and devices, and the start of MIoT and 5G deployments worldwide, blockchain offered a very promising solution to address new complex enterprise offerings and transactions executed at the edge of the network.
To provide valid reasoning behind this, we must evaluate the specific capabilities of blockchain in the context of the growing mobile ecosystem.
The Benefits of Blockchain
A crucial factor driving demand for blockchain integration is the explosion in the number of digital transactions, especially with 5G deployments accelerating. The vital aspects of blockchain technology are the speed, ease, flexibility, and security it offers for monetizing transactions. Blockchain is simply the natural evolution for clearing and settlement in 2020 and beyond.
This may not seem like an exciting topic to the general consumer, but those in the mobile space know how huge this is. In an all-connected world, driven by the internet of things (IoT) and the new 5G mobile standard, the business relationships for these new applications are often exasperatingly complicated – especially when it comes to accurately preparing for settlement. Hence, the ability to securely validate and monetize these transactions has become more vital than ever.
As mobile traffic continues to explode and new connected and edge technologies revolutionize mobile services, a new clearing and settlement network is needed to handle everything. Blockchain technology offers an ideally suited solution to meet these requirements. The technology’s capability to develop a “smart contract,” which helps determine commercial arrangements governing each transaction between parties through an open consensus process, is immensely appealing for these new 5G business models. It eliminates many entry barriers and allows mobile operators and enterprises to partner together in a simpler manner for faster time to market.
With blockchain, clearing and settlement will be modernized for the new connected world, opening several new capabilities and opportunities for the future.
A Solution for the 5G Ecosystem
We’re witnessing a market shift toward what we call “universal commerce,” where operators are going to start to do more business with new partners as 5G technology is adopted locally and globally.
The ever-increasing ecosystem of interconnected networks and transactions is redefining the way many companies will do business. And this isn’t just restricted to mobile operators and roaming. There will be companies in many industries and markets that will be looking to 5G to implement next generation use cases. As a result, operators will have a tremendous opportunity to capitalize on this market need and expand their revenue opportunities in the next year as the world returns to normalcy.
The findings of a recent global survey of operators by telecom research firm Heavy Reading emphasize the importance of this. The survey found that more than half (51%) of operators consider themselves lacking in terms of identifying the technical requirements – much less implementing – for multi-party billing, reconciliation, and payment solutions. Operators obviously still have a long way to go in terms of setting the foundation for the processes and systems required for a successful 5G ecosystem, as the deployments continue worldwide.
Let’s look at mobile roaming as a specific example of how blockchain alleviates this problem. Currently, there are lots of questions involved with billing between partners. For example, “My results look different than your input” taking the form of back and forth banter is common. But with blockchain, this scenario and complication is completely avoided thanks to the distributed ledger. This ledger houses total volumes and calculations that are visible to both parties and use agreement terms established for the relationship using smart contracts.
With distributed ledgers, everybody has the same information in a private blockchain network – and it cannot be altered by any party. This reduces the likelihood of discrepancies and disputed invoices, because it is all based on highly accurate, reliable information. And this ledger provides a complete audit trail that can be seen much earlier in the monetization process, preemptively addressing most businesses’ transaction concerns.
Today’s current systems are simply not suited to handle such a complicated ecosystem – and operators will need to completely transform their back end to keep up with the interconnected network of partners needed for 5G.
The Time for Trust is Now
With 5G consumer deployments ongoing worldwide, both the demand and supply for connected devices is only going to accelerate – especially in the light of the expected increase in remote workers.
As IoT continues to take off and billions of new connected devices enter the market in 2021, operators will need a way to clear and settle payment between partners. While blockchain in these use cases may have minimal impact from the average consumer’s perspective, it will be a revolution on the side of businesses wanting to participate in the 5G ecosystem.
Blockchain is thus emerging as a new cornerstone for operators to effectively manage their 5G ecosystems. In fact, pilot projects using blockchain to ensure accurate and efficient multi-party billing and settlement for new services are already underway. Last May, operators Orange and MTS Russia partnered with IBM to complete a proof of concept trial leveraging open source blockchain technology to instantly create, validate and view new wholesale billing and charging processes for clearing and settlement between service chain partners.
This technology will be key to centralize 5G billing and charging processes to handle large volumes of transactions between parties through smart contracts. Those parties must be able to collaborate in an ecosystem with accuracy, real-time speed, security, and – most importantly – trust. The connected ecosystem of 5G the mobile industry that has been proselytizing for years cannot come to fruition without this trust.
This trust will be provided by blockchain’s underlying cryptography and distributed consensus, and will ultimately be the foundation upon with a new 5G ecosystem of connected services and applications will be built on.