The telecommunication industry has faced numerous challenges, such as antiquated back-office systems, time-intensive disputes, accrual mishaps, and revenue blockage. However, there is a solution that can address these issues and help carriers move from a reactive mode to a proactive one: incorporating the functional layers of blockchain architecture.
Observations from the MEF Q1 Member’s Meeting
I recently spoke at the Q1 Member’s Meeting of MEF (a global industry association of network, cloud, and technology providers) to discuss how large carriers such as AT&T and Verizon are beginning to implement blockchain technology in their intercarrier ecosystem. During this session, I highlighted the importance of adopting blockchain to ensure a first-mover advantage and stay ahead of the competition.
I also stressed that one of the main reasons carriers need to embrace blockchain is that it can automate the intercarrier ecosystem, which currently takes too much time, is rife with errors & inefficiencies, and costs too much money. I pointed out that the objective concerns price, disputes, and back billing, which are significant issues in the wholesale space. Sage Management has built a solution that allows for agreement on the price at the point of order, significantly benefiting carriers and their customers.
Blockchain Is Not An Instant Setup
Blockchain adoption is not an overnight decision; it must be carefully implemented over time. Carriers do not want to find themselves in a reactive mode and lose business because they have yet to implement blockchain within their processes or be forced to implement it with bad data. Entering a blockchain with bad data would lead to overpaying for off-net circuits and underbilling revenue to clients. Blockchain is coming, and— everything will be automated. Therefore, carriers need to get their ducks in a row now.
We have taken almost 20 years of ordering data at Sage Management to create the business logic for our blockchain solution. As a result, we have a significant advantage over other companies that don’t have blockchain, ordering, contract, and tariff knowledge codified in their solution.
There are concerns about public blockchain security, especially around privacy and confidentiality. However, our solution is not on a public blockchain but on permissioned blockchains where the carriers dictate their security. To help carriers prepare for blockchain, we introduced a real-time rating system that provides carriers with the validated rates at the time of firm order confirmation from the vendor. Our blockchain system rates at the point of order and corrects it to a more optimal cost if the carrier client has ordered the service incorrectly or sub-optimally. In our solution, carrier clients have a truth-in billing approach, where the order is optimized, and the rate is accrued before invoicing. The audit trail is automated from order to first bill.
I am pleased that MEF acknowledges blockchain as a way to revolutionize how carriers exchange value in the U.S. intercarrier ecosystem. This revolutionary system is why all of the largest carriers in the world have joined MEF, working towards a global API standard to twilight the old, archaic ordering and billing systems. But, if carriers don’t start preparing now, the blockchain decision will eventually be forced on them, leaving carriers with no preparation time.
Blockchain is the future of the telecom industry, and carriers need to start embracing it to stay ahead of the competition. The benefits of adopting blockchain include:
- Positive impact on gross margin.
- Eliminating the costs associated with disputes and back billing.
- Retiring legacy billing and ordering systems.
- Streamlining staff and processes.
- Improving the accrual process from the point of order to the financial statement.
- Allowing for a clean slate of accruals.
- Better inventory management.
- Saving time and money.
The early results are in: blockchain is a game changer in the telecom space. Our blockchain solution has yielded an average ROI of over 1,500% for its carrier clients. Carriers must prepare themselves for the inevitable shift towards blockchain and ensure they are ready to adapt to this technological change.