Leveraging Blockchain and AI to transform the telecom wholesale business
Blockchain and AI have been the primary focus area for Telco’s worldwide in recent time. It is astonishing to see how tech companies have open-heartedly embraced AI in their businesses, leveraging big data and boosting their profitability in the era of skewed margins. On the other hand, blockchain has been an active area of research to solve the most critical problem of ‘financial settlement.’ Telecom operators are also exploring the use of blockchain to use cases such as fraud mitigation, digital identity fraud, BCE roaming, and others to improve ROI and offset pressure from traditional businesses.
While Blockchain and AI are new and most advanced technologies, there has been little focus on these two technologies used together. Although many divisions within a telco are using AI for automation, marketing, sales, and customer experience and are gaining a ton out of it, one department that can also benefit a lot is “wholesale.” This combination can help the wholesale business reduce its decision-making process and significantly improve the margins. Let’s look at some of the critical areas where Telco can leverage blockchain and AI together in the wholesale business.
Telecom operators and wholesale carriers’ margins rely heavily on bilateral and unilateral deals. These deals are for a specific period, where participating carriers are bound to send committed traffic to a certain destination/s per the agreement. In the modern era, having an extended deal period does not ensure profitability because of changing dynamics. What if telecom operators can build wholesale products daily or weekly based on the market trend and scenarios. Blockchain and AI can play an essential role in such a scenario. Blockchain can ensure uniformity and security by building a database of trusted data, which can be relied upon for decision-making. This data can create a data set that can train the various machine learning (ML) models to recommend the most profitable deals. There can be multiple inputs, such as the rate sheets shared by wholesale partners, daily traffic, wholesale partner’s performance, history, and more. Once these models are trained, they can forecast and build wholesale products, which ensures a higher margin with wholesale carriers.
Disputes are the major roadblocks in a telecom operator’s revenue cycle. While the bills can be settled every month or earlier depending upon the agreed cycle, dispute resolution can take months or sometimes years. Based on a recent survey, operators can take up to 15-45 days for dispute identification and confirmation on average. These disputes mainly arise due to data issues at the mediation level, arbitrations, or recommendations. Again, blockchain and AI can come to the rescue in such cases. CBAN being an agreed data exchange format in the blockchain community ensures that all the data received from the partner operators gets converted into a specified format. Partner operators can share this data daily instead of waiting till the end of the month. A scenario might arise if the operator wants to use new data for settlement, and that has been changed at the source operator side. That is where the AI models can ensure that such changes can be captured in the model itself, with minimal feature engineering, and quickly roll out these changes in production. So once again, blockchain and AI go hand in hand to ensure that such possibilities exist.
Finally, innovation in the wholesale market must continue if wholesale voice trading businesses wish to remain profitable. The traditional wholesale way of working has been disrupted, and operators can still reverse or stop declining voice revenues using blockchain and AI/ML. Wholesale business and revenue growth will depend on developing new wholesale products, gaining new wholesale customers or partners, and resolving disputes faster. We’ve seen the sector’s movement into providing things like blockchain-based reconciliation, interconnection and hubbing, BCE-based roaming, fraud prevention, cloud services, machine learning and mobility, and no doubt other such services offerings will coil up as the wholesale demand for traffic change and new digital wholesale services rise up. It is now up to the traditional telecoms industry to keep pace or fall behind the dynamic digital players.
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Adesh Balyan is a business consultant responsible for driving strategic and business development activities for Subex, focusing on B2B partner management, partner ecosystem, and Digital Billing & Settlement while engaging in digital transformation consulting for telecom and other B2B enterprise commercial organization.