Blockchain was first introduced more than a decade ago, where it served as the public transaction ledger of the cryptocurrency Bitcoin. Since that time, the technology’s potential has been widely considered and debated by businesses across all industries, to the extent that the global blockchain market is expected to be worth more than $16 billion by 2024.
With a predicted compound annual growth rate (CAGR) of more than 87%, the Asia Pacific region was singled out for particularly high annual growth due to increasing investments in the technology by venture capitalists, as well as its inclusion in several government initiatives and policies. India’s government, for example, is currently exploring the use of blockchain in areas such as land registry, judicial records and transportation. Asia’s private sector, too, is showing confidence in the technology, with oil and gas giant Reliance Industries employing blockchain for trade finance.
Across the globe, more than two in five businesses have now adopted blockchain technologies, and the telecom sector in particular has witnessed significant investments in the technology. According to IBM, more than a third of communications services providers (CSPs) currently are considering or are engaged actively with blockchain. Industry players such as AT&T and BT, for example, have filed patents regarding the application of blockchain technology in telecoms. Others, including Orange, Verizon and Telstra, have invested in blockchain-related projects, prototypes and frameworks. Just recently, IBM Research completed blockchain pilots with the Telecom Regulatory Authority of India (TRAI) to improve mobile data records.
Trust and transparency
Organizations across the telco ecosystem are embracing blockchain’s fundamental capability to offer transparency and immutability of data, particularly with regard to how it could be applied in those cases where information sharing, trust and visibility are of prime importance. Use cases involving multiple parties, such as supply chain visibility and asset tracking, require information transparency, while those in which there is limited trust require transactions to be recorded as digital contracts between each party.
Operators also are welcoming the impact of blockchain’s information sharing capabilities, particularly finding interest in how they enable improvements in efficiencies and time to market. Deliverables can be handed off from one party to another, for example, with no loss in quality or timeliness, while processes within the product development cycle can be optimized by digitizing information handoffs on a blockchain platform.
Barriers to adoption
Despite its obvious potential, barriers remain to blockchain’s widespread adoption within the telecoms industry. For one thing, there is concern that blockchain may not yet be ready to deliver on its promises. Only last year, Gartner suggested the technology was not yet capable of justifying the hype in terms of mission-critical use within the enterprise. This sentiment was echoed by the GSMA, which said technology still is limited and yet to be proven.
A current lack of standardization and interoperability is also hindering its adoption. The cloud-based repository GitHub, for example, recently featured more than 6,500 active blockchain projects, written in different coding languages and using different platforms, protocols, privacy measures and consensus mechanisms.
It appears, however, that steps are being taken to address this issue. Hyperledger, a global cross-industry collaborative blockchain initiative, boasts more than 250 members, including IBM, Cisco and SAP. Elsewhere, the Enterprise Ethereum Alliance (EEA), concerned with developing a set of global open-source, standards-based blockchain specifications, has in excess of 500 members, including Accenture, JP Morgan and Microsoft.
And the number of consortia around the technology continues to grow. There were 60 in 2018, according to Gartner, up from just 28 the previous year. Furthermore, at least one of these, the Carrier Blockchain Study Group (CBSG), was created to encourage joint development of blockchain initiatives in the telecoms industry.
Looking to the future
The adoption of a standardized blockchain platform will help operators to fully realize the technology’s value. In time, once operators become more accustomed to blockchain and more confident in the way they use it, it’s likely that their focus will turn to the use of distributed apps (Dapps) as a secure means of interfacing and integrating with other organizations. By eliminating the need for both expensive infrastructure and intermediaries, the level of increased interoperability it affords will help operators enjoy a quicker, more efficient and more cost-effective means of transmitting information. This, in turn, will deliver new opportunities and new revenue streams for operators.
Blockchain is being widely adopted across the world – at a particularly aggressive rate across Asia – and is set to disrupt businesses throughout every industry. It’s just a matter of time before the hype is overcome and the final barriers of standardization and interoperability come down. Once they do, it will be time for the telecoms industry to enjoy the benefits that blockchain offers.
Jitendra Thethi is AVP of Technology and Innovation at Aricent
Image credit: iStock Photo