I have written a few articles about how the blockchain will affect various industry segments and future technology. Today we will be focusing in how the blockchain might influence the telecommunication sector.
The telecommunication sector is massive, and might also be the industry which have been influenced most in the recent years, through the development of new technologies. Just think of the introduction of Voice over IP, Video calling and the likes. All of these technologies influence the older telecommunications (for example fixed line) companies directly. In the older day, these companies had the monopolies and traditionally the control of the full value chain. Actually I guess still today if you really think about it.
Then cellphone networks then arrived and put a big dent in fixed line industry. As a result, the sim card industry was born and large new players was quick to revolutionize the telecommunication industry with their voice calls and text messages. Then came things like Whatsapp, which totally disrupted the text messaging environment, by basically killing the text messages revenue stream, Skype, which was recently bought by Microsoft, which will probably kill the voice industry as a whole, due to the fact that so many organisations are dependent on the various must have tools that Microsoft Own, like, Operating Systems and Microsoft Office.
There are not many global organisations which do not use these tools. Many have tried, using the open source versions, but at the end of the day, the integration between all these Microsoft Based systems, are making it cost effective to use the Microsoft tools to run their businesses. If you add tools like Facebook - which have both voice calling and messaging, Viber, free voice calls over Cellphone and IP, and Google Messenger and Google Voice calls, the olden days off owning the full value stream are a day of the past.
So how do these telecommunication companies survive in the future?
In this new competitive market, where most of the communication solutions are available for free, by the new players on the block, the telecommunication industry has already started to diversify their offerings, based on the fact that most of them in each of the countries where they usually have a monopoly. They have an competitive advantage over the new players, as a result of their history, in a few areas, but there are two aspects which stand above the rest.
- They have massive customer bases which they can market new services to.
- They usually own the infrastructure – i.e. the lines in the ground where all data transmission will run through.
Not a too bad advantage to have over your competitors is it?
So how do telecommunication industry companies take advantage of the blockchain.
There are many ways, but I found a very nice diagram and image by Enrique Velasco-Castillp a Senior analyst at analysysmason.com. Full credit to him, and here is a link to his article.
If you look at the above image, there is a massive market for telecommunication providers to tap into their existing customer base and leveraging their current infrastructure.
Identity Management
There is a very large opportunity for not only telecommunication providers, but anybody, which play in the authentication game. Just look at how many sites, are pushing their way of “Authentication” into the market by providing the “code for free” to developers. Companies like Facebook, Google, Apple, and many others are currently fighting this battle. It is a very clever game that they are playing, as when you launch a new product, why not just add the Log In with Facebook option. When you add this option, you are widening your audience exponentially. People will much more easily try your software if they do not have to subscribe from scratch.
Internal Processes
This is basically the backbone of all operations in the telecommunication industry. This industry specifically has massive problems with the detail around billing, invoicing etc. Just think about the benefits for having this on a blockchain, which by default have an full audit trail and both Public and Private keys. All transactions (Calls, SMS’s etc.) can be recorded in the ledger and you have it by default. Please refer back to my post from yesterday, for a brief explanation about the basics of a blockchain
Roaming
Doesn’t matter where in the world you are, if you go through a blockchain technology it will be available. Why do their need to be real physical switches, if we could write software switches that run on the blockchain tech? The blockchain is distributed remember.
Smart cities
Massive opportunities here
Mobile Money
Hey isn’t this actually what Crypto Currency is?
I can write a lot about each of the opportunities or strategic offerings listed in the image above in the above image. Please read more about this in Enrique Velasco-Castillp blog post.
Is the Telecommunication industry doomed?
Definitely not, but In my opinion, they must stop being too arrogant by using their financial muscle and large influence over their customer base. What they should do is adopt a new way of thinking, less arrogant and more transparent.
One thing that I can promise you is that when you own the physical infrastructure, have a massive customer base, which can be seen as a captured audience. This captured audience already pay you on a monthly basis, mostly through a debit order. You are actually set for a new chapter in your organisations book. All you have to do is create a strategic plan to adopt the newer technologies like block chain in an honest transparent and obviously responsible business model, you will be set for the next few years.