No, we are not Liverpool fans. We are even not following the premier league regularly. Although, considering how Juergen Klopp made doubters to believers is potentially a reason to change our minds. And this piece is neither about a song nor about football, it’s essentially about entering new territory and how to best approach this endeavor.
Let’s assume we are in a jungle. That’s like a lot of companies might feel when confronted with new foundational technologies like AI, distributed ledger, robotics process automation and the convergent ecosystems developing around them. It’s new territory. We look at the jungle from a telecom company’s perspective here. Technological, operational and business model expertise at the crossroads of telecom and these technologies is currently rather rare. This applies to distributed ledger and blockchain technology in particular.
So why not join hands with others and jointly maneuvering through the jungle. That’s what most of the top telecom companies and also smaller innovative players are doing. When it comes to blockchain and distributed ledger technology (dlt) the decentralized nature inherently requires consensus and alignment beyond company borders with a multitude of other players. To give an example: Optimizing manual, time consuming and error probe settlement processes between telecom carriers is a promising application field for blockchain. Here an alignment on a technological standard is a major prerequisite for making blockchain technology scalable.
But who are the right partners to walk with? A snapshot of what happened recently in blockchain/dlt alliances and partnerships might provide initial guidance:
- 11 telecom operators including Deutsche Telekom Global Carrier Services, Telefonica, Orange, and Telstra formed the Communications Blockchain Network(CBN). CBN evolved as a special vehicle out of the ITW Global Leaders Forum, a network of leaders from the world’s largest wholesale carriers. The routes of the CBN trace back to two of its founding members, namely Colt and PWWC Global as being one of the first telcos experimenting with blockchain and smart contracts for settlement of international voice calls. The goal of the Communications Blockchain Network is to build an interoperable blockchain network for inter-carrier-settlements.
- In Korea the global leading device manufacturer Samsung teamed up with the national telecom carriers SKT, KT, LGPlus and financial services providers to develop and launch a self-sovereign identity solution.
- Telenor’s microfinance Bank, Valyou from Malasia and Easypay established a partnership for international remittance.
- Vodafone and Illiad from France joined the Trust Your Supplier alliance.
These exemplary cases reveal quite different approaches to building alliances and partnerships. And there is a lot more going on in the telecom space. For a first orientation in the jungle you can find an overview below, which is based on recent research and discussions with the top 20 largest telecom companies. The canvas is non-exhaustive and reflect only an excerpt of our research.
Blockchain in Telecoms: Alliance & Partnership Canvas
Alliances cover typically a wide scope of use cases and involve a broader set of companies whereas partnerships are more narrow and focus on the implementation and/or commercialization of a specific use case. The category ‘within telecom industry’ goes beyond telecom providers and also includes collaborations with their subsidiaries (i.e. payment providers), network equipment suppliers and device manufacturers. ‘Cross-industry’ set-ups have at least one telecom carrier participating. That does not necessarily imply that the carrier is in the lead or even that core telecom services are in the center of interest. The Blockchain Transport Alliance with Orange Business Services and the Trust Your Supplier alliance with Vodafone and Illiad are examples for the latter.
General open-source collaborations build on blockchain/dlt technology platforms without a specific industry or use case focus. KDDI and the NTT subsidiary NTTData, both from Japan, as well as SK Telecom from Korea are members of the Enterprise Ethereum Alliance for example. Swisscom, Huawei, NTT Data and recently Deutsche Telekom (via Linux foundation) joined the Hyperledger ‘club’.
Note that we focus on forms of cooperation in which the involved companies remain independent organisations, so no mergers or acquisitions are considered. We have also excluded equity participation via investments, joint ventures or other legal structures where profits and losses are shared. Overall these alternative set-ups are currently rare compared to the partnerships and alliances categories covered in our canvas.
Although our categorization arguably leaves room for discussion, it might help to more easily and better understand the basic directions for finding comrades in the decentralized blockchain world.
This logically leads to the question: What’s the ‘right’ alliance to join? With whom is it best to partner with? Unsurprisingly there is no one-size-fits-it-all answer to these questions. Alliances differ e.g. in terms of use cases covered, technical approach and in terms of their governance. What’s ‘right’ and ‘best’ depends essentially on where you come from, i.e. what your existing capabilities are, and where you want to go, i.e. your goals and ambitions. As large telecom companies usually target multiple use case scenarios, they tend to be active in a number of alliances and establish multiple partnerships.
Within the industry, partnerships make especially sense for use cases that intend to improve efficiency in processes that involve many other telecom industry players. Inter-carrier settlements — in particular on an international scale — and roaming are typical examples. A blockchain-enabled SIM, such as recently announced by China Telecom, is another example that might become relevant in the future.
Cross-industry partnerships come into play and are particulary meaningful if an end-user service is delivered along a value chain that involves contributors from different industries or government entities. IOT, micropayment, and authentication such as self-sovereign mobile identity fall into this category. Often these services are part of a more holistic eco-system. X-Ride, the e-scooter sharing pilot from Deutsche Telekom, is an interesting recent showcase of how blockchain-enabled self-sovereign identity management, data storage, payment and charging work seamlessly in a decentralized ecosystem and can simplify the user experience.
To further substantiate a decision on specific alliances to join or best partners to engage with, requires a deeper dive into the 5 collaboration blocks of our canvas. In upcoming publications, we will provide more comprehensive insights into the ‘blocks’, so that it becomes easier to find the right approach tailored to the specific goals of an individual telecom player.
But whatever approach is chosen, one thing is clear: In the jungle, it’s better not to walk alone.
Interested to learn more about blockchain alliances and partnerships in telecoms? Just stay tuned!
Special thanks to Leon Erichson who supported the research for this article and to Federico Homberg, Head of Commercial Roaming Business Development at Deutsche Telekom Carrier Services, for the critical review of the article and his hands-on insights re blockchain solutions in the international carrier business.
Further readings on
Blockchain & Telecoms:
- Bitcoin Calling
- Smartphone-Blockchain love affair – Continued?
- Blockchain, telecoms and smartphones: Match on tinder?
- New kids on the block: Disrupting telecoms?
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