Telecom companies are seeking new ways to compete with emerging advanced technologies around the world, and many are trying to adopt new methodologies to work more efficiently. As telecom companies are now set to enter the era of 6G, they are focusing more on how to prepare for the coming challenges that will arise in the market. One of the new technological advances that can help CSPs strengthen their businesses is the decentralized network of blockchain. Decentralized networks run on servers that are run independently rather than on a centralized server owned by a business. “Mastodon” is one example of a decentralized social network. It is based on open-source software and functions a lot like Twitter.
Just Another Block in the Chain
In blockchain, the decentralization of networks is not a new concept. To create a new technological solution, we mainly consider three main networks: centralized, distributed, and decentralized. Blockchain technologies often use decentralized networks, but such decentralized digital networks do not have a single command server, which we can consider a “central authority.” Instead, the control of the network is distributed among its users or participants. Users can create their own social network and learn how it works with decentralized networks because they have more control and autonomy. The use of blockchain technology as decentralized networks has attracted a lot of interest in recent years. But how can telecommunications companies benefit from decentralized networks?
The Value of Decentralized Networks in the Telecom Sector
It is possible for even the smallest telecom operators to gain access to the global market for telecom services due to the decentralized system. Smaller telecom operators can provide services at the same level as large telecom operators, and large telecom operators will be able to increase their customer base. Due to its peer-to-peer nature and the absence of intermediaries, blockchain technology allows the records of transactions to be read when settling payments mutually. As a result, telecom industries can increase their revenues without making investments.
Moreover, a decentralized network allows voice, video and text communications to be sent directly from one point to another without being intercepted by third parties.
Decentralization Impacting Africa
The wave of decentralization in Africa started between the late 1980s and early 1990s, often in the context of public sector reforms associated with structural adjustment programs. Countries like Uganda, Ghana, Nigeria, Botswana, Côte d’Ivoire, Kenya and Tanzania were among the first to include decentralization in their public sector. With 66 % of the continent unbanked, the blockchain is poised to play a key role in the decentralization of finance in Africa. Fintechs like M-Pesa and Momo, are already fully reliant on digital communications, so security and trust will be critical. Blockchain will help build that trust through a distributed database of discrete blocks. The growth of community networks in Africa is partly due to concerns about how tech companies use personal data. Since the networks are local, they are less likely to become targets of surveillance.
Seeking Various Opportunities
The commitment to give everyone a fair chance to fully develop their own business is a major challenge for telecom operators, which is why blockchain offers opportunities for the telecommunications sector.
The first opportunity is fraud prevention; blockchain can reduce the costs of fraud detection applications by reducing the losses, which can save telecom companies $19 billion annually. Furthermore, it provides an identity; decentralized identity seeks to provide trusted proof of identity and ensure absolute ownership and control of their identities in a secure and approachable manner. The settlement opportunity is based on the fact that blockchain can solve inter-system differences and bring transparency between the systems that are involved in a decentralized partnership. Also, micropayments at telecom companies can enable payments for OTT services such as payment wallets, music applications, games, etc., resulting in high revenues.
As for the future, trust and transparency matter the most for any organization. The decentralized nature of a peer-to-peer network entails a decentralized database with a copy of every record accessible to all users. Similarly, it requires users to authenticate each new block in systems. By storing information in multiple copies across a network, blockchains reduce single points of failure, hacking attacks and control by any single entity. Since blockchains are decentralized, they do not require expensive infrastructures or third-party intermediaries as they are digitally distributed across many systems. More importantly, it increases the speed of exchange between users of the different departments in the company.
Telecom companies are all set to provide ever greater speeds and coverage to their customers by maintaining more base stations. We will be able to revolutionize the telecommunications industry as well as integrate hotel, transportation and many other industries with blockchain.