Categories: Telecom

How Decentralized Networks impact the Telecom Sector?

How Decentralized Networks impact the Telecom Sector?

The Telecom sector is looking for new ways to evolve and compete with emerging advanced technologies around the world. Many Companies are trying to adapt new methodologies to work more efficiently. According to a report, the number of telecom subscribers in India has increased from 2.92 million to 1,170,73 million at the end of May 2022. As telecom companies are now entering the era of 5G, they are focusing more on how to keep up with the upcoming challenges that will arise in the market. 

One of the new technological advancements that can help telecom companies to strengthen their businesses is decentralized networks in the blockchain. A decentralized network comes into play to transform the business of CSPs to consolidate their operations, create undeniable business model opportunities, and increase revenue.  

What are Decentralized networks?

In Blockchain, decentralization of networks is not a new concept. To build a new technological solution, mainly three primary networks are considered: centralized, distributed, and decentralized. But Blockchain technologies often use decentralized networks. 

A decentralized digital network has no single server of command or we can say it doesn’t have a central authority. Instead of having the central authority, control of the network is distributed among its users or participants. Decentralized networks provide more control and autonomy to the users. The users can set up their social network and find out how it works.   

An example of a decentralized network is the Mastodon which is open-source software and functions like Twitter. It allows users to create their servers, rather than having a parent server that is owned by the platform. Many systems run on a social networking blockchain allowing data entries to be stored in servers around the world. Data can be seen in real-time by anyone on the network which ensures transparency in the network. 

The use of blockchain technology as decentralized networks has gained lot of attention in the past few years. But how can telecom companies get the benefit of network decentralization? 

The necessity of Decentralized networks in the Telecom Sector

According to Oleg Pravdin (Managing Director of Blockchain in Telecom), “Blockchain opens the opportunity to cover markets that were simply impossible to cover before.”  

The Decentralized System allows even the smallest telecom operators to access the global telecommunication services market. Small telecom operators can provide services at the same level as large telecom operators do, and large telecom operators will be able to grow their client bases. In case of the absence of any intermediaries, while making mutual settlement of payments, blockchain technology helps to read the transactions records as it is a distributed peer-to-peer network. Therefore, telecom industries can increase their revenue without making any investments. 

A decentralized network in the telecom industry allows voice, video, and text communications that can be sent directly from one point to another without going through intercepted telecom networks. 

Let’s see how blockchain provides various opportunities to the telecom sector:

  • Fraud prevention: Blockchain can reduce the costs of fraud detection applications by reducing the losses, this can save telecom companies $19 billion annually.
  • Identity: Decentralized identity aims to provide official proof of identity and absolute ownership and control over their identities in a secure and accessible way.
  • Settlement: Settlement based on the blockchain can solve Inter Systems differences and bring transparency between the systems that are involved in a decentralized partnership.
  • Micropayments: Telecom companies can enable payments for OTT services such as payment wallets, music applications, games, etc resulting in high revenues.
  • Smart contracting – With the automation of internal processes of Blockchain, the billing processes, roaming, and supply chain can be managed. Using Blockchain, Smart Contracts can guarantee the settlement between the partners by routing from one operator’s Blockchain to another operator which helps in increasing transparency to the end user. Let’s assume a subscriber who operates while roaming and dials out on the network. This transaction is logged on the Blockchain network and gets saved.

Decentralized Networks – Is the future of the Telecom Sector?

Trust and transparency matter the most for any organization. Due to the distributed nature of decentralized networks, the database is decentralized with a copy of the whole record that is available to all users of the peer-to-peer network. Also, 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, or control by any single entity. 

As the blockchain is decentralized and digitally distributed across many systems, it reduces the need for expensive infrastructures and third-party intermediaries. More importantly, it increases the speed of exchange between users of the different departments in the company. 

Conclusion

Telecom companies are all set to provide ever greater speeds and coverage to their customers by maintaining more base stations. Blockchain will not only allow us to revolutionize the telecommunications industry but will also conduct a global integration of telecommunications, hotels, transportation, restaurant, and many other types of businesses.  

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Pallavi Yadav

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