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How data management and the blockchain help telcos

19 February 2020

How can data management and the blockchain generate value for telecommunications operators, who are grappling with the 5G transition, along with an associated review of their business models? To understand the reasons, we first need to consider that the volume of data generated by the telcos is constantly growing and will continue to do so with the transition to next generation mobile networks. All this poses no small challenges in terms of management, safety and regulatory compliance, but it is also an opportunity that the telcos, in constant search of new models, cannot afford to neglect. At stake, in fact, is the possibility of optimizing their services, improving customer satisfaction, creating new products and pivoting on innovation to gain a competitive advantage on the market.

How data management creates value for telcos

A first opportunity is undoubtedly to exploit the capabilities of big data analytics to extract information useful to the business from an infinity of data, structured or not, coming from the networks: devices used, location, call logs, consumption patterns and expenses, transactions, technology used, use of data on mobile networks, roaming, most visited places, etc. 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 customers and thus achieve one of the great objectives of the 4.0 paradigm: offering a personalized service. Also because telcos have to manage a characteristic aspect of their business, that is the constant turnover of customers who switch to their competitors and then return 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 the telcos' activities: as the customer's reacquisition cost is quite high, the micro-segmentation of customers allows operators to develop customized services, even addressing them to those customers who, based on a predictive analysis, are likely to switch operators soon.

The benefits of blockchain, from roaming to 5G

In addition to the different service scenarios already envisaged in other sectors, especially in the financial sector, blockchain has enormous potential even in the telecommunications market, and this is 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 operators is a symptom of progress and of a journey that has already begun.

How can blockchain therefore encourage the generation of 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. Consider roaming, for example: the use of a distributed register would allow immediate, automatic (via Smart Contract) and secure transactions between operators for managing roaming costs, without the need for offline reconciliation procedures and the use of third parties, with significant benefits, even in terms of costs. Furthermore, blockchain would make all procedures extremely fast and secure, acting as a valuable tool also for fraud prevention, both in the area of roaming and identity management. The subscription identity fraud, which occurs when a user accesses the services of the network through a false identity, can in fact be blocked by blockchain, especially in a scenario of collaboration between operators: here too, the replacement of independent databases (and not necessarily updated) with a common, secure, shared and distributed model, would have positive repercussions, both on costs and on network security. Furthermore, the public/private cryptographic key mechanism inherent in blockchain would make it possible to identify the device directly and to associate it securely 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 a timely manner. The introduction of solutions based on Blockchain, with a distributed and shared model among all operators, based on transparency and security, enables transactions and operator 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 possible applications 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, an extremely interesting hypothesis especially in the industrial sector, where Industry 4.0 projects could benefit both from the peculiar characteristics of 5G, and from the immediacy and security of a guaranteed peer-to-peer network.



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