Unlocking Telecom Assets
Trillions of dollars of telecom assets, left underutilized as a result of legacy systems, are poised to be unlocked by the unique blockchain properties of transparency and programmability.
Telecom is infrastructure: the industry is responsible for deploying vast, interconnected fiber optic and copper cables, large steel towers, and millions of radios and other hardware. These builds are capital intensive and net high-value assets that enable recurring revenue for decades. However, surplus or underutilized assets can remain as un-leveraged line items on a balance sheet, while the operator struggles with debt heavy financials.
Today’s telecom assets are vast — nearly a trillion dollars is locked up in ATT and Verizon assets alone. (ATT listed 408bn in assets, Verizon 380Bn in assets). The book value of the top 30 operators fixed assets is more than $2.4 trillion. The value of these assets could potentially erase their debt or be leveraged to build new networks, but the traditional inflexible financial structure associated with these assets has left them vastly underutilized.
These illiquid resources are like the veins of gold beneath a mountain. And, like the gold rush, opening access to these assets to new entrants will unlock the previously untapped potential. The unique properties of blockchain now enable anyone to participate in the building, funding, and operation of telecom networks because of programmability and transparency that was not possible before blockchain.
Programmability: Programmability enables revenue sharing between entities and crucially provides the ability to decouple the infrastructure and service cash flows. In the past, legacy systems only allowed for investment into the business as the infrastructure and assets were tightly coupled with service cash flows. In an open access system where the infrastructure is remitted revenue separately from the revenue of service providers, existing telecoms can monetize or sell their infrastructure assets, while retaining the service income.
Open access models are not necessarily new. Many municipalities have chosen this approach — owning the infrastructure as a public asset and enabling a number of service providers to sell bandwidth, streaming services and customer support to the end users. Althea’s novel on-chain model, however, is the first of its kind to enable multi-entity infrastructure revenue remitted permissionlessly on-chain — many different entities, including pure investors, can own infrastructure and earn a revenue share programmatically, decoupled from the service entities. This is salient to unlocking assets and enabling new entrants to the market.
This programmability also enables new market functions like pooling assets together, or paying back loans with the revenue from the asset automatically. Bringing about dramatically novel ways to finance, build, and operate infrastructure networks and opening up the markets to more participants.
Transparency: By tokenizing the accounts of the physical hardware associated with the operation of telecom assets, Althea uniquely empowers transparency to the historical cash flows of the asset, which transforms the demand risk assessment and opens up trading and funding opportunities without the cumbersome processes involved with legacy assets.
Althea’s smart contracts and on-chain settlement removes the fallibility and friction of manual sessment.
Liquid Infrastructure: Althea is the blockchain based machine-to-machine payment platform that enables many different entities to own infrastructure and receive a revenue share automatically. It is similar to the metering and billing of an electrical grid with solar panels on your home. It is metered and then you are remitted credit for producing energy back into the grid. Anyone in an Althea network can own hardware that is connected to a telecom tower, a mile of fiber optic cable or radios and earn revenue.
Liquid Infrastructure is an on-chain digital asset representation created by “liquefying” the asset earning revenue. This liquefied asset now has historical and transparent on-chain revenues (denominated in stable coins/dollar values) for which real value can be derived and verified.
Telecom assets are investable — returns are high, churns are low and the assets are physical and less risky than many intangible or digital assets.
It is also now possible for enterprises to build private networks that roam with public ones. Municipalities, corporations, and nonprofit entities are building physical networks that are then managed by independent operators. This allows them to leverage these assets in new ways by maintaining ownership of the infrastructure while enabling new services not bound by their limitations.
These new entrants, unencumbered by the cost of the infrastructure build, can focus on lowering costs and introducing additional services typically reserved for high end clients. Investors can diversify their portfolios to lower risk assets with excellent returns.
Blockchain technology unlocks the potential of these telecom assets like the “gold in the mountain”. It enables more than new markets. It redefines how telecom infrastructure is financed, built, and operated. We are at an exciting and pivotal point in time in telecom history that will enable the necessary and exponential building of infrastructure to provide the foundation for a new era of access and innovative services.
Come Build the Future of Telecom with Us!
Are you building in the telecom or blockchain space? We are actively looking for builders and projects. Contact us at hello@althea.net.
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