Blockchain- Future of Telecom industry

In today’s flat world the major backbone is communication. The need for CONNECTED SOCIETY with the evolution of 5G/IOT technology has increased the data flow exponentially. This has draw a new line of business and technical challenges for Communication Service Provider (CSP) on;

(i) Secure and Trustworthy communication
(ii) Cross Border Jurisdiction process
(iii) Global fraud
(iv) Revenue leakage e.g. with loss of data
(v) Delay in multi party Settlement
(iv) Involvement of third party to ensure data integrity
(v) Real time tracking of events and Service Level Agreement

These aforesaid concerns challenged the business leaders on their existing business model and force them to think beyond to foster a new “TRULY GLOBAL” business model for operators to create new revenue stream supporting transactions in any currencies.

Here we can leverage Blockchain technology using Smart Contracts (SC). Blockchain facilitates the decentralized approach for CSP so that there will not be a single authority in between to ensure data integrity and security. 

In nutshell Blockchain technology;

  • Is a shared, replicated, permissioned ledger technology
  • Can open business networks by taking out cost, improving efficiencies and increase accessibility and revenue stream
  • Is Immutable, Data in Append mode only and can’t be altered.

Smart contracts are self-executable, verified and signed contracts encoded in programming language over blockchain network. This SC shall be self executed after fulfilling the predefined criteria of executions between the parties. Smart Contracts can be created using several popular SDK’s such as Ethereum, Hyperledger etc.

The Current Vs Blockchain business model for all types of inter operators transactions shall be;

In this above scenarios, the existing business model is “CENTRALISED” and Telecos have dependency to rely on third party (Middleman) to ensure transactions/data authenticity/integrity routed to their another partner Telecos.

It clearly shows lack of trust between partner Teleco operators and they are buying trust from third party to authenticate.

The Blockchain- Smart Contract will enable DECENTRALISED business model and both the partner telecom operators can mutually define there rules and transact in real time directly. This will create trust with partners and reduces their huge OPEX cost.

The typical service flow of Blockchain smart contract technology will be;

The current implementation challenges with Blockchain are;

  • No Industry standard for blockchain adaptation unlike ETSI
  • No Regulation Guidelines while dealing with Third Party Information
  • No Pricing standardization (Pricing guidelines)

Network function virtualization (NFV)

NFV was introduced to reduce the number of hardware platform and create flexibility in network and IT domain. NFV aims to leverage IT standard virtualization technology to consolidate network applications into  telecommunication standard service switches and storage and to create openness towards application layer.

NFV is to create virtualization layer between the software and hardware. The decoupling of hardware and software removes challenges that operators today have in regard to dependencies of the two like upgrades, expansions, new functions  and all activities in network that impact the individual nodes and create  long lead time. With the decoupling of software and hardware all of these mismanages will be removed. Additionally to this since the hardware base is  not application dependent, it gives the operators possibility to allow other  users to utilize the network, creating a new revenue stream and important  part is all this can be managed in cloud. Meaning that cloud shall orchestrate the virtualization layer that it in turns automatically administrate the cloud resources at hand.

NFV is implementation of network functions as software only entities that run over the NFV infrastructure (NFVi).

NFV has 3 main working domains

1- Virtual network functions (VNF) – as the software implementation of network function which are capable to running over NFVi. A VNF is virtualization of network functions in a legacy non virtualized network. E.g.:  NF is 3GPP evolved packet core EPC network management, such as mobility management entities (MME), serving gateway (SGW), and Packet data network gateway (PGW), Residential gateway (RGW), dynamic host configuration protocol (DHCP) servers, firewall etc.

A VNF can be composed of multiple internal components. E.g. one VNF can be deployed over multiple virtual machines (VM) or each VM host a single component of VNF. In other cases whole VNF can be deployed on single VM also.

2- NFVi– including the diversity of physical resources and how these can be virtualized. NFVi supports the execution of VNF.

3- NFV management and orchestration– which covers orchestration and  life cycle management of physical and software resources that supports the infrastructure virtualization and life cycle management of VNF’s. Focus on all virtualization specific management tasks necessary in the NFV framework.

NFV framework.

The NFV framework enables dynamic construction and management of VNF instances and relationship between them regarding data, control, management and dependencies and other attributes.

NFV architectural framework identifies the main functional blocks and main reference point between such blocks like VNF, EMS (element management system), NFVI (including HW and virtualized resources) and virtualization layers.

NFV benefits.

Reduce CAPEX, OPEX, power consumption, time to implement the new network services, Improve ROI. Greater flexibility of scaling.