How Hyperledger Fabric is impacting the Telco, Media and Entertainment industry

The rise of blockchain

Blockchain is already a reality in the Telecommunication, Media and Entertainment (TME) industry. In fact, many companies, both established and start-ups, have implemented blockchain-based solutions to automize, digitize and re-invent some of their processes.

Like other industries, TME is characterized by the lack of visibility, transparency and auditability of some of its processes, making asset transactions less efficient, thus generating both extra costs and revenue leakage. In telecommunication, a good example of such a process is wholesale voice settlements. Carriers around the world exchange large amounts of money for interconnection costs, but there are no industry standards to ensure consistency and transparency. Each report is subject to dispute and reconciliation. In the media industry, we all know how difficult it is for artists and music labels to track the revenues that are due to them from streaming and video platforms.

Hyperledger helps in bringing efficiency to TME operations

The stakeholders in the TME industry are pioneers in the application of blockchain to solve some of the critical industry issues. In particular, they recognize that a platform designed for the enterprise like Hyperledger Fabric provides tangible value-adds such as  privacy, transparency, trust and security. Leveraging these key characteristics, telco and media companies have started building consortia and projects to validate the value of the technology. These consortia can be categorized into three categories: operations-focused, customer experience and full revenue generating ecosystems.

In the first category, companies collaborate to improve back end processes that take place between them, with the goal of eliminating redundant costs and activities. This helps improve productivity and efficiency in the value chain. In a nutshell, this is an efficiency play. Some processes touch all players in the industry. Examples include roaming settlements for telecommunications or digital advertising supply chains for the media industry. (Recently, Syniverse and IBM went live with the first blockchain-based roaming solution compliant with the new GSMA billing standard.) Alternatively, some processes may interest only a major player and its closest suppliers. 

Reinventing customer experience with Hyperledger 

The second category, customer experience-focused consortia, revolves around improving the engagement of the customer rather than the efficiency of the processes. The main financial goal is not cost cutting but revenue generation, either through new services or new business models.

In this context, the sky is the limit: use cases are several and very different. When the goal is to provide a better customer experience, Hyperledger technologies can be used to improve customer engagement and make client-facing activities easier and less redundant. For example: IBM uses Hyperledger Fabric to simplify the dispute resolution process for commercial financing. Fabric is also used to automatically enforce warranties or reduce the time needed to port your mobile number from one carrier to another, thus improving the customer experience. 

On the other side, blockchain can be used to create new services for telecommunication and media companies. For decades, telcos have harbored an ambition to get into the mobile payment business. Now, with blockchain, they have an easy and secure way to implement digital wallets, create tokens and exchange them in their own network or with other networks. The same can apply to the gaming industry, where the concept of credits and digital token has been popular in the last few years but was hard to monetize.

Carriers can also now provide digital identity services. Blockchain is the ideal platform for creating a trusted identity, and carriers are in the perfect position to enable subscribers with digital identity and to develop an ecosystem of applications. IBM’s Verify Credentials creates a decentralized approach to identity management – enabled by blockchain – building on top of open standards in combination with Decentralized Identity Foundation (DIF), World Wide Web Consortium (W3C) and other standards groups

Hyperledger Fabric is the foundation of new industry ecosystems

Finally, the third category, the ecosystems, comprises consortia that cover the entire industry. Consortia turn into ecosystems over time, when an initial application becomes an industry-wide platform, setting the standards for the whole industry and allowing for flexible, modular and open participation, in a “network of networks” fashion. The founder of the ecosystem can extract high value from the platform and become a winner.

The application of Hyperledger Fabric in the TME industry has not achieved the level of maturity necessary for the establishment of a real ecosystem, but a few companies and industry organizations are already laying the foundations for the future ecosystems.

There are several organizations that are creating consortia and implementing blockchain networks.

• Companies that interact frequently are getting together to form small groups of three  or four participants to streamline existing processes. They can either be telecom carriers that need to facilitate settlements among themselves or music streaming services that want to remunerate music labels faster and more accurately.
• Regulators are playing a big role: in India, the local telecom regulatory agency (TRAI) mandated the use of blockchain to prevent unsolicited commercial communication. Indian mobile subscribers can opt out of telemarketing calls and a blockchain distributed ledger will manage this information for carriers, content providers and the regulators.  IBM is working with TRAI and Bharti Airtel on the commercial deployment that will initially help the operator curb unwanted calls and messages from advertisers. It will also help the operator in Mobile Number Portability, interconnect settlements, supply chain streamlining and content partner settlement.
• The European Union, through the Horizon 2020 fund, is financing several blockchain projects to improve the way information and infrastructure is shared within telecom companies.
• Service providers are very active organizations that are leveraging their neutrality to build industry-wide ecosystems. They can be either established platform providers that already serve the majority of their market or new start-ups trying to disrupt the competition. In the first case, service providers are improving their value proposition through blockchain. In the second case, start-ups are rethinking the way the industry works.
• Finally, industry standard organizations are gathering their members to define how blockchain can transform their industry. This is happening both in telco and media. In telco, organizations such as the GSMA, TWI GLF and the Bridge Alliance are advocating for blockchain with the goal of establishing common standards for the most immediate blockchain use cases (e.g., wholesale and roaming settlements). In the media space, AdLedger is leveraging blockchain to re-shape the digital advertising industry.

2020 is going to be a KEY year for blockchain in the TME industry: we are going to see the outcome of the work done in the last couple years and the move to production of many consortia.

Cover image by pisauikan from Pixabay