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Vishal Awal
Vice President and Managing Partner – Telecom
IBM Global Business Services

Rebooting Telecommunication Sector Via Trusted And Transparent Collaboration And Imagination Driven By Blockchain

Indian communications service providers (CSPs) cater to a vast and diverse population with ever-increasing appetite for consumer items, technology, and services that bring time- and cost-savings. Today, India boasts close to 1.15 billion wireless connections; catering to approximately 80 percent of India’s unique subscriber ceiling of 900 million.

Cell phones are used for self-enhancing personal habits like health, banking, shopping, security, education, financial management, and business interactions like payments, taxation, KYC, content creation, disbursements, and travel.

The above interactions are applicable across all sectors of the economy – both public and private – making telecom a true sector of sectors. Being at the epicenter of convergence of industries, CSPs have emerged as the true custodians of our privacy and personal data.

Trust enabled through blockchain

Blockchains significantly impact the ways in which industries do business. The technology includes components to permit effective collaboration and to enhance problem-solving efficiencies among players in a business ecosystem.

A blockchain foundation can be the springboard for increased trust among CSP ecosystems. Examples include –

SMS spam and pesky calls battle. In India, 76 percent of all messages sent are unsolicited. Subscribers are harassed by pesky calls from call centers, autonomous dialers, and robo calls. Subscribers also have no control on consent data provided to brands.

The industry needed a solution that would establish a standardized regulation on the acquisition, use, and maintenance of consent data for promotional, transactional, or service messages and calls. It would enable CSPs to track and trace every consent provided by a subscriber to a brand and use of that consent for promotions, services, or transactions. It would ensure that subscribers would have complete ownership and management capability over their consent data. CSPs would store, secure, and not share the data on behalf of the subscribers.

TRAI and Indian CSPs came together and created one blockchain network to record in subscriber brand-specific consents. All messages and call activity conducted by the brands is now scrubbed against the consents before reaching the end-subscriber, thereby ensuring that all unsolicited messages are restricted. Corporate brands wanting to use CSPs’ resources to communicate to customers are required to pre-register to drive accountability for any unsolicited messages sent. The solution provides a transparent and verifiable audit record while maintaining customer consent privacy.

Paperless ticketing. CSPs are collaborating with banking, healthcare, and logistics solutions to determine the movement of goods, track speeds, and steps for diagnostic analysis, and provide recommendations for end-users.

IBM has created a PoV along with CSPs to leverage identity validation, geo-tracking, and settlement mechanism services to enable users to buy, validate, and pay for public transit tickets including buses, trains, and metros.

The solution proposes to deliver significant environmental savings from the reduced use of paper tickets and operational cost savings from maintenance costs of manual ticket windows. The solution will use the cell-phone network and will require minimal investments from the solution providers. It will also enable the authorities to clamp down on ticketless travel and reduce revenue leakages.

Micro-credentialization. Employment background checks alone are unable to uncover red flags for 1 in 10 fraudsters. Research conducted suggests a median loss of USD 130,000 per fraudulent employee per annum from inefficient employees by multinationals.

Background Check Data Elements:

  • Employment background
  • Professional reference
  • Personal reference
  • Criminal records – court check
  • Financial credit
  • Identity proof check
  • Address verification
  • Global due diligence database
  • Academic record check
  • Court record check
  • Address verification
  • Drug test
  • Medical test
  • Aadhaar verification
  • Passport verification
  • PAN verification
  • Driving license verification
  • Voters identity check

Average cost of a background check for validating employment history and education credentials is between USD 50 and USD 150. Cost elements excluded from above include duplicate degrees, original copies, notarization charges, and hours spent in data collection. This increases the cost of the background check to about USD 300.

In cases where there is lack of certified sources of data, delays from 2–12 weeks are quite common. Delays are further extended for international degrees or employers that follow a different process of providing verifications.

“National Academic Depository (NAD)” is an NDML initiative to facilitate academic institutions to digitally, securely, and quickly issue online academic awards to the students directly in their online accounts. IBM has started working with a group of Indian firms to leverage the telecom blockchain’s identity-verification services for direct exchange of data related to educational certificates and employment verifications.

The solution is expected to reduce cost of the background check by 75 percent and reduce process time to a few hours.

Collaboration issues to overcome in the imminent future

Blockchain does offer multiple opportunities to telecommunication sector to further diversify their service offerings across the economy. These opportunities, however, present some obstacles that need to be addressed:

Regulatory collaboration. CSPs can collaborate with regulators to establish standard guidelines for collaboration and development.

Data maintenance. CSPs and industry need to reach an agreement on data standards, structures, and transmissions protocols.

Other telco use-cases to help industry include fraud prevention, identity management, transition to 5G, and IoT security.

As major telecom companies continue to invest in blockchain programs, it is apparent that stakeholders recognize the value of future integrations. It is time to start leveraging the power of immutable, transparent, and decentralized telco solutions to create trustworthy business networks.

Blockchain can help telecom providers in five ways:

Saves time. Transactions take minutes instead of days. Smart contracts – agreements stored on the blockchain and executed automatically as part of transactions – streamline processes.

Cuts cost. Administrative overhead and cost of intermediaries can be reduced as participants can police their networks themselves. Duplication of effort can be eliminated because all participants have access to the ledger, and the need for third-party verifications is greatly reduced.

Enhances data quality. In a blockchain, information is visible to all permissioned participants, and quality and accuracy are maintained throughout all transactions.

Reduces risk. Blockchain’s security features help protect against tampering, fraud, and cybercrime. If a network is permissioned, it enables the creation of a members-only network with proof that members are who they say they are, and that goods or assets traded are exactly as represented.

Increases trust. Transparency is key. The ledger is shared and updated with every transaction. Participants can validate transactions and verify identities or ownership without the need for third-party intermediaries. Since each transaction builds on every other transaction, any corruption is quickly apparent to all members of the blockchain, and tampering with the ledger is nearly impossible. If third-party oversight is required, blockchain reduces the burden on the regulatory system by making it easier for auditors and regulators to review relevant transaction details and verify compliance.

Blockchain can also help telcos create new revenue streams while improving customer service. For example, CSPs could provide blockchain-based identity-as-a-service to consumers. Identity authorization across mobile devices, apps, and organizations would make it easier and safer for customers to identify themselves to government agencies, banks, hospitals, and other businesses.

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