What are the advantages of blockchain for businesses

How can data management and blockchain generate value for telecommunications operators, who in this period are struggling with the transition to 5G, a consequent revision of their business models? To understand the reasons, you must first consider that the volume of data generated by telcos is constantly growing and will increasingly continue to do so with the transition to the new generation mobile network. All of this poses significant challenges in terms of management, safety and regulatory compliance, but it is also an opportunity that telcos, constantly on the lookout for new models, cannot afford to overlook. At stake, in fact, is the possibility of optimizing their services, improving customer satisfaction, creating new products and focusing on innovation to obtain a competitive advantage on the market.

How data management creates value for telcos

A first opportunity is undoubtedly that of exploiting the capabilities of big data analytics to extract useful information for the business from the infinite amount of data, structured or otherwise, coming from the networks: used devices, location, call logs, usage and spending patterns, transactions, technology used, use of data on the mobile network, roaming, most visited places and so on. Focusing on the fact that telcos serve millions of people, the ability to mix different datasets, exploit advanced technologies such as sentiment analysis and extract valuable information allows them to micro-segment their customers and thus achieve one of the great objectives of paradigm 4.0: offering a tailor-made service. Also because telcos must manage a characteristic aspect of their business, that is, the constant turnover of customers who switch to competitors and then come back on board following particularly advantageous offers. For this reason, customer retention is one of the most important challenges and parameters on which to measure the effectiveness of telco activities: because the cost of reacquiring the customer is rather high, the micro-segmentation of customers allows providers to develop tailor-made services, perhaps addressing them to those customers who, based on predictive analysis, are likely to change operators in the short term.

The benefits of blockchain, from roaming to 5G

In addition to the various service scenarios already foreseen in other sectors, especially in the financial one, blockchain has enormous potential also in the telecommunications market, and this both as an opportunity for cost reduction and for the development of new valuable activities. Although its use in the telco world is not yet widespread, the development of many POCs (Proof of Concept) by the most representative providers is a symptom of progress and of a route that’s already underway.

So how can blockchain help generate value for telcos? The simplest, and at the same time most effective, hypothesis is the reduction of complexity in the relationships between the operators themselves. Take roaming, for example: the use of a distributed ledger would allow immediate, automated (through Smart Contracts) and secure transactions among providers to manage roaming costs, without the need for offline reconciliation procedures and the involvement of third parties, with significant benefits also in terms of costs. Furthermore, blockchain would make all procedures extremely fast and safe, acting as a valuable tool also for the prevention of fraud, both in the field of roaming and identity management. Subscription identity fraud, which occurs when a user accesses network services through false identity, can in fact be curbed by blockchain, especially in a scenario of collaboration between operators: here too, the replacement of independent databases (and not necessarily updated ones) with a common, secure, shared and distributed model, would have a positive impact on both costs and network security. In addition, the cryptographic mechanism with public/private key inherent in blockchain would make it possible to directly identify the device and securely associate it with a defined identity.

Another very interesting case for the use of blockchain is number portability, a process that is currently complex since it is based on a centralized model, with numerous manual operations and unsuitable for managing large volumes of requests in an appropriate time. The introduction of blockchain-based solutions, with a distributed and shared model among all providers, based on transparency and security, enables transactions and provider changes in a very short time. Exprivia | Italtel has developed a solution based on its i-RPS product, the Centralized Routing & Policy Engine, which was presented in Barcelona at the Mobile World Congress 2019.

These are just some of the potential areas of use of blockchain in the telco world: in the 5G paradigm, for example, technology could find application in the field of discovery and selection of the access network or, among the typical applications of the new generation network, for the management and connection of thousands of IoT sensors, a very interesting hypothesis especially in the industrial field, where Industry 4.0 projects could benefit both from the peculiar characteristics of 5G, and from the immediacy and security of a peer-to-peer network guaranteed by blockchain.

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