How Innovative Blockchain Technology Will Change Telecom

Julie Stoughton

New technologies facilitate digital transformation that brings our world forward by providing efficiency and solving problems. Blockchain is one such innovative technology that is expected to greatly change the Internet and how companies do business. This technology is especially relevant to the telecommunications, or telecom, industry and could change the business model immensely.

How could blockchain be applied to the telecom industry? And how would it affect business models and customers?

Blockchain’s ability to change the telecom industry

Blockchain is a major development that could dramatically shift the way telecom companies do business. It could also change competition within the industry. It is expected to alter the ways communication service providers (CSPs) manage their business models and even create new types of models that provide higher profits.

Nonetheless, blockchain also creates new opportunities for competition within the telecom industry, so it has the potential to disrupt current service providers. This technology was previously prominent in the finance industry, but new, programmable types of blockchain make it relevant to telecom and other industries.

Dan Cummings noted in ETH News that blockchain has the potential to improve current service providers’ infrastructure. For instance, it could provide 5G network support and securitization of the Internet of Things, which is also becoming more prominent within the broader digital transformation.

Examples of using blockchain

One example of how blockchain could change business models is by removing the third-party financial institutions that come between telecom companies and customers. This could streamline the transaction process and minimize disputes to save time and money. In a time when online security is an increasing concern, blockchain provides a solution. The secure transaction system it creates can cut down on fraud and risk and protect against revising and tampering.

Blockchain also helps the world move forward with other technologies and ways of living. For example, if someone traveling outside their home service area wants to use the Internet on a mobile device, blockchain enables the CSP to make that happen through contracts with global operators that keep the service affordable, safe, and efficient. This method would replace current, ineffective roaming services. Blockchain can also support customers’ preferences for prepaid or postpaid services, providing real-time balance updates and easily changing customers’ billing system upon request.

Disruptive Analysis says micropayments, off-grid IoT, network function virtualization management, and enterprise smart contracts are some of the use cases that could particularly benefit from switching to blockchain.

How can telecom companies keep up?

If blockchain becomes the way of the future for the telecommunications industry, companies in this sector must get on board to stay competitive in the market. For telecom companies to use blockchain, they need to have or adopt a network that can handle it. As the IDC whitepaper “The Future Services Sector: Connected Services for Continuous Delivery” says, “as technologies like blockchain become more widely adopted, the network becomes the basis for the movement of value, not just information. Consequently, the network must be resilient.”

Overall, blockchain creates new opportunities to make the telecommunications industry safer from security issues, work more efficiently, and operate with more cost-effective business models. Experts believe that it will shift the industry and greatly affect society in the process.

Learn how to bring new technologies and services together to power digital transformation by downloading The Future Services Sector: Connected Services for Continuous Delivery.


Julie Stoughton

About Julie Stoughton

Julie Stoughton is the Head of Telecommunications Marketing & Communications at SAP. She is a seasoned professional with 16 years of marketing and product marketing experience in software and media technologies. Julie's specialties include strategic market development, positioning and messaging, customer segmentation, product launches, ROI analysis, and go-to-market execution.