18h | Gopikrishnan Konnanath, Manah Khalil
Blockchain may bring the benefit of immutable trust, but adoption can’t happen in isolation. Suresh Chintada, CTO at Subex, tells Melanie Mingas why the first step is all about trust
As far as tech trends go, the last year has been an unparallelled whirlwind of next-generation developments; it’s also been seminal for blockchain. From cryptocurrencies to tracking vaccines, DLT is having its day and the trend is gaining pace in telecoms too.
Recent months have seen such developments as Nokia and Clear’s optical networking services and IBM and R3’s partnership on enterprise solutions. By 2023, it is expected that blockchain’s use in telecoms will be worth $993.8 million, following a compound annual growth rate (CAGR) of 84.4% since 2018.
At Subex, things are also heating up – blockchain customer wins even got a mention in the Q3 FY21 financial results.
In November, a partnership with Tech Mahindra saw the firm collaborate on a suite of new blockchain-enabled solutions that would allow communication service providers (CSPs) to benefit from what they described as “enhanced operational efficiencies” across fraud mitigation and operations.
By its very nature, modern business is dependent on the benefits blockchain enables. However, as Sam Evans, senior MD at Delta Partners Group wrote a proliferation of use cases is different to a robust busines model, and that is a significant challenge for telco adoption.
“We definitely see some challenges in the technology’s adoption,” says Subex CTO Suresh Chintada, who in April was invited to join the Forbes Technology Council.
“The main ones are the low performance of enterprise blockchain and the complexity of the technology. It takes more than a couple of telcos to justify a blockchain because essentially it enables a peer-to-peer network, so the more participants there are, the value of the blockchain becomes so much higher,” he adds.
For its part, Subex’s move into blockchain was a natural progression. As a software and analytics company, its bread and butter since 1992 has been revenue and fraud management, as well as settlement and network analytics – it counts more than 200 telco customers, including BT, Airtel, Jio, VI, T-Mobile, AT&T, Orange and Swisscom.
In 2019, the ITW Global Leaders’ Forum named Subex as one of 10 technology provider partners supporting the Communications Business Automation Network, and today it participates in several telco forums where industry use cases are discussed, including the Linux Foundation’s Hyperledger Special Interest Group (SIG), which it chairs.
Subex is also a member of the RAG Wangiri Blockchain Consortium, working with partners to develop real-time industry threat intelligence on fraud by utilising blockchain.
“Our participation in the blockchain tech space is essentially moderated by our company’s vision of enabling digital trust in the digital ecosystems of the digital economy,” says Chintada.
At Subex digital trust has three components: the “non-negotiable” foundation layer of risk management; the “sustenance layer” that binds identity and security; and the strategic layer, which creates competitive advantage and supports brand reputation elements.
“As you can see, you can look at the blockchain technology and it really becomes a very compelling technology for Subex in our drive to establishing digital trust in this new economy,” Chintada adds.
No telco is an island
The Subex view is that, on the three-point trust scale, blockchain is a layer three technology; that is, it can enhance brand reputation by delivering the immutable trust required in transactions. However, while these benefits reflect on the individual CSP they’re most effective when amplified across the industry.
“To justify the ROI and to make the best use of what a distributed ledger such as blockchain can offer, you need to have more participation,” Chintada says, but here is where the challenges really stack up.
“What I see today is that it is complex to code the business rules and logic into the blockchain code, or smart contracts. There is a lack of automation, for example, to convert existing contracts to chain code, there is a lack of tools and technologies at this point in time. But I think it is a work in progress,” he continues. Incidentally, this trend is also echoed by Infosys.
Combined, low automation and the complexity of configuration are “limiting our progress a little in adopting blockchain as a technology” – as, too, is the lack of standardisation in interfaces, which “often leads to inconsistencies in how the technology and solution gets doubled up and implemented,” Chintada adds.
“Blockchain itself compels collaboration and collaboration between telcos is vital to make the entire process less expensive, as well as delivering ROI and more participation. So some telcos probably need to start standardising the interfaces – for example, there should be a definition of standards for data exchange – it sounds really simple, but we do not really have anything,” says Chintada.
The projects may sound complex, but that isn’t to say there is no low hanging fruit to be picked by those who want it. Subex believes there are three immediate blockchain use cases that telcos can leverage: dealer management, margin management and data governance. And it doesn’t stop there. The decentralised, trust-based ecosystem of the future – as envisioned by Subex – can even deliver greater value from content for telcos transitioning to digital players.
“What does blockchain lend itself to? It essentially makes any transaction a trusted transaction. Distributed ledger requires no other intermediaries, so immutability is a key concept of blockchain – it prevents tamper – and blockchain allows you verifiability.
“Some of these things are inherent in the architecture and if I look at the use cases that help in privacy, identity, security, billing, settlements, SLAs… if you see most telcos participate in these activities, they have settlements to make. There is huge overlap in how blockchain can solve telco’s problems today. For me, if we can address the removal of some of the challenges in the technology adoption, I don’t see why more telcos won’t come in and embrace it,” Chintada says.
“There are exciting possibilities for blockchain adoption in the telco space,” he adds.
Chintada started his career almost 30 years ago, writing software for early 2G networks. “From then to now the world has completely changed,” he observes.
“There are more phones than people in the world today and the amount of change it has brought is unimaginable in the sense that it has become a force multiplier. I wonder about where technology will lead us,” he says.
In imagining the potential, Chintada’s thoughts turn to 5G – the ten-fold increase in capabilities, the applications yet to be launched, not to mention the usability of “that kind of technology and bandwidth”.
“For example, I was just reading this morning a news piece that said that by 2030 mixed reality will be the norm… that’s easy to imagine.” Following the thought, he cites recent advances in deep learning and machine learning, before continuing: “A number of use cases I see in the telco space could be resolved by using blockchain technology but imagined differently to how they are today. That’s my hope.”
How far it will go is difficult to envision, but as for where it starts, there are plenty of ideas – including how 5G network slicing could change partner settlement, itself driving a greater need for verifiable, real-time transactions. Could it be the “killer application” that blockchain needs to get off the ground?
“If we look at specific use cases, I think 5G, as it is getting deployed around the world, we can’t even imagine how some of the 5G use cases will lend themselves to blockchain.
“You only see the limited deployment of network slicing, I think the partner settlement somehow, we know becomes an interesting problem when you have slices owned by different entities,” Chintada says, predicting the multilateral contracts could be in line for a leg up on the efficiency stakes.
Either way, with digitalisation in full swing, the outlook for blockchain is strong. Last year, IDC forecast global spending on the tech could reach $17.9 billion in 2024, up from $4.1 billion in 2020. However, this will not be driven by telcos alone and IDC says the growth will predominantly stem from manufacturing and banking.
Following the trend, Subex too is looking at fintech and e-commerce – which, in future, will no doubt drive a full circle that brings even more pressing use cases back round to telecoms.
In short, blockchain – much like communications – will be the force multiplier across multiple industries.
“I think it is going to change how we experience the world moving forwards and I think as the world becomes much more digital, the entities we interact with will increasingly be digital and may not be humans at all – bots or something we don’t understand – it becomes natural for us to think of a network where we can trust what is on the other side of [our] communications, whether it is a financial transaction, entertainment, just a social transaction, it doesn’t matter.
“If you remove some of the challenges that make it work, it can have a great future.”