Last months a number of consultancy companies, analysts and publishers claim that blockchain will change the way telecom carriers will work internally and externally with other carriers. Meanwhile most international carriers have started projects to evaluate how blockchain could indeed help them to improve profitability and to save costs.

What are the biggest pain points for telecom companies? Main issues within a service provider’s organization are the manual processes, as probably in any other company and industry as well: manual reconciliation of invoices between carriers, fraud detection where still a human is still required to take the final decision whether a traffic stream is fraudulent and intercarrier settlement processes which are far behind the level of automation and speed given by SDN and SD-WAN connectivity provisioning processes across network borders.

What is blockchain able to offer what telecom companies are missing so far? Blockchain provides the technology and processes to document the transaction and to provide the mechanisms for settlement in an absolute secured environment and in a complete automated way. If this is proven to work for the telecom industry, blockchain provides indeed the chance to reduce fraud, save costs due to automated settlement and adapt the payment streams to the speed of modern software defined network services. So, after early trials and successful proof of concept by a group of carriers at the recent MEF conference there will be more projects of groups of telecom operators coming soon.

Will blockchain improve the profitability of carriers on a long term? I would doubt so. As the most use cases apply to Wholesale services and processes, it is very likely that any cost reduction or avoidance will be priced in again in future services as happened for Wholesale Voice services in the past. So, to implement blockchain might be an obligation in the future to stay in business, but will not save the industry.