The Telecom Sector Needs To Embrace Blockchain To Stay Globally Competitive
A report on ‘The Economic Impact Of Smart Ledgers On World Trade’ released at Furniture Maker’s Hall in the heart of London’s financial district recently mapped out the trade frictions that blockchain technology might be able to offset, especially in the realm of non-tariff and bureaucratic barriers to trade.
What was interesting was the assessment by industry sector, drawing on a comprehensive survey by the International Association for Contract & Commercial Management (IACCM) which surveyed its 45K global membership on Smart-Ledger related questions. Specifically, in respect of the telecommunications sector, geographically speaking nearly 40% of respondents come from Europe, over 20% from North America and 20% from Asia, with the remainder from Africa and the Middle East.
The research by the IACCM asked its global membership, including telecom, three key questions to ascertain the potential impact of smart ledgers on world trade:
Question 1: Smart Ledger (aka blockchain or distributed ledger) technology is touted as a technology for fair play in the globalized world. Are you: (a) Unaware of this technology and these claims (b) Sceptical that this technology would make much difference to contracting and trade? © Planning to trial this technology or collaborate with others on trialling it? (d) Or have you trialled this technology? (e) Using Smart Ledgers for operational purposes?
And the findings? Interestingly in terms of (e) using smart ledgers for operational purposes, the telecom sector ranks second behind the engineering and construction sector with 10% for firms already using smart ledgers (see figure 19 below; © Z/Yen Group, 2018; © IACCM 2018 taken from Appendix 1). Less impressive in terms of plans to trial the technology, telecom comes behind most other industry sectors.
Question 2 There are a host of technologies with the potential to improve contracting and trade, particularly cross-border. Would you please rank in order of importance? (a) Smart ledger (b) AI © Statistical techniques (d) Identity systems (e) Collaborative doc platforms (f) Common data standards (g) Cheaper faster payment systems (h) Micropayment systems.
In that portion of the survey, telecom performed less well in terms of its attitude to smart ledgers, coming top of the sectors for ranking the value of artificial intelligence, but fell outside the top seven sectors when it comes to smart ledgers.
Question 3 There are a number of impediments to contracting and trade. Would you please rank in order of ‘pain’ (a) Contracting ‘onboarding’ (b) Defining contract and supplier agreements © Credit information (d) Government reporting (e) Supporting documentation (f) Making and validating payments (g) Contract execution (h) Contractual disputes. Here the engineering sector led the pack in terms of credit information and validation, as well as in making and validating payments.
What this means for the telecom sector
As the research shows while the telecom sector has been actively investigating the use of smart ledgers to improve the business performance, they certainly lag behind other sectors in terms of future plans to trial this technology. But if the pain points for the telecom sector at least on the retail side, are in validating credit and payment information, then that’s where blockchain efforts should focus.
There remains the question of the opportunities for the enterprise side of the telco sector from the use of blockchain technologies. Mayande Walker, COO of OpenCryptoTrust says the enterprise side of the business needs to grasp the opportunities with both hands: “OpenCT is resolving telecom specific problems and thus accelerating Business to Business (B2B) adoption of the blockchain. Within telecom there tends to be less resistance to embracing technology that provides immediate benefit and cost savings to enterprise customers. So we focused on killer applications that translated into significant operational efficiency, security, and cost reduction for their clients.
“By focusing on enterprise client solutions first — we then can leverage blockchain technology to introduce seamless ‘transparency billing’. Large telcos have dedicated billing departments just to review accounts payable and receivables which on average take 3–6 weeks to confirm just from an accuracy standpoint.
“With OpenCT’s blockchain platform — all that time and man power are no longer needed which creates millions of dollars of savings and extra revenue.”
The reports’ authors drew the conclusion, that smart ledger technology could boost world trade in goods by at least $35bn per annum. As Z/Yen Group’s Michael Mainelli wrote in the report: “Trade reaps economic benefits from specialization and comparative advantage, creates prosperity, distributes success and wealth, and collectively enriches all of our societies and communities. Hopefully, knowing the scale of relative benefits can help speed adoption of some boring technology — ‘multi-organisational databases with a super audit trail’ — for the benefit of all of us”.
Long Finance’s report, ‘The Economic Impact Of Smart Ledgers On World Trade’ sponsored by the Cardano Foundation is available for download (PDF).
For more details about OpenCT’s blockchain project please visit www.openct.io or join one of our weekly webinars to find out more /www.openct.io/upcoming-webinars
