“The business changes. The technology changes. The team changes. The team members change. The problem isn’t change, per se, because change is going to happen; the problem, rather, is the inability to cope with change when it comes” (Kent Beck)
It can be argued that there is a consensus about the hype that Blockchain technology has caused. In fact, it is likely that the first word that comes up after hearing Blockchain is Bitcoin. Although the influence of cryptocurrencies has been undeniable, there is a wide range of use cases for Blockchain that range from food traceability to land registration. All in all, it seems that Blockchain hype is never-ending due to its inherent versatility.
As featured in ROCCO’s Roaming Blockchain Market Intelligence Report 2020 – Strategic Analysis, , from a telco perspective, there are many voices in both the industry and academia that emphasise Blockchain’s capabilities to streamline the Roaming settlement process. Among its advantages, they emphasise the reduction in operational costs as it provides a more efficient platform for clearing and roaming settlement. In relation to revenues, this technology also supports a faster revenue recognition. This is of key importance as Roaming revenues are one of the main revenue sources for MNOs.
As Telefonica quoted in the ROCCO Report:
“Blockchain can reduce the settlement process time from a month to minutes which consequently reduces the payment cycle”
Moreover, if smart contracts become the norm, they can diminish disputes due to the automatisation of the process. Security concerns are also addressed, as in Blockchain there is no room for issues such as denial of service attacks. This is also reinforced as transparency and tamper-proof are key features of Blockchain.
Despite optimism, the potential adoption of Blockchain for roaming has had its own hindrances. Some operators highlight that the adaptation process from legacy systems to Blockchain is costly, which explains their reluctance to change. Moreover, there are some voices claiming that Blockchain might end up with DCHs as an intermediary.
Vodafone, Telefonica’s and Deutsche Telekoms’s announcement this week that they have worked together to test and implement blockchain for Roaming will certainly drive the ambitions of Operators around the world who can finally see proof that there’s something in this beyond bitcoins…
In any case, it’s still early to draw any conclusion as Blockchain has not become the standard in the settlement process. What we can expect is a change in this ecosystem that will entail new challenges as well as opportunities.
In the last year ROCCO has been interviewing a number of mobile operators and vendors to ascertain how valuable Blockchain could be to the long term challenges around Wholesale Roaming processes. Our study features 9 companies perspectives and seems to suggest places to start, suggesting how all the companies in our ecosystem could get involved to optimise the industry.
ROCCO Strategy’s consultants work alongside our research team to evaluate the entire end-to-end potential in the market. For more information or to Consult with Rocco simply contact HQ@rocco.group.
Listen also to ROCCO RADIO Podcasts on Roaming Blockchain:
- Eureka! Blockchain Leadership with Surlak Patel
- THE BIG INTERVIEW ON ROAMING BLOCKCHAIN WITH NICK WENNEKERS FROM TOMIA
Written by Antonio Rodriguez – Lead Researcher at ROCCO Research