Unfortunately, that’s not the way ordering has ever worked in telecom. As a result, a staggering 70%+ of telecom invoices contain errors! For the past 25 years, Sage Management, the dedicated telecom division of SIB, has saved carriers, enterprises, and government agencies more than $4 billion by correcting these ordering errors after the fact. But we’ve always envisioned—and been working toward—a better way.
Now, that solution is finally and definitively here.
I recently had the privilege of joining Pascal Menezes, host of MEF’s Executives at the Edge podcast, to talk about how the telecom industry finally has a viable solution for proactively optimizing the telecom ordering process at the point of order. The key lies in leveraging blockchain technology and zero knowledge proofs. Game-changing blockchain technologies are already proving themselves in live use cases, and it won’t be long before the zkEVM (zero knowledge Ethereum Virtual Machine) solution is available to every carrier and organization, of every size, everywhere.
Check out the 30-minute episode to get the whole story on the evolution of blockchain in telecom. Here are some of the highlights you will hear more about:
- Why is the telecom ordering process so broken in the first place?
Systems in the telecom space were built in the 90s around highly regulated legacy TDM networks. Modernized network services are being forced into old TDM billing and ordering models through patchwork manual processes, swivel chair processes, and workarounds that are rife with errors. Even something like ethernet that’s been around for forever doesn’t really fit into the legacy TDM billing and ordering systems. So, ordering teams use job aids to fill out hundreds of fields on an Access Service Request, or ASR. If any field is incorrect, the billing system selects a contract vehicle that usually isn’t optimal. In many cases, the system defaults to the highest rate possible, which leads to massive overbillings.
- What’s the problem with fixing errors after they are billed?
When errors exist in an order, the engineering team can usually work around the issues and physically engineer an accurate solution. That means it can be months before the first bill is issued and the ordering organization even discovers the error. Then, a dispute must be filed, and a settlement process initiated, which almost always results in settling for pennies on the dollar. Using this approach, we’ve saved organizations more than $4 billion over the past couple of decades. But that’s a fraction of what could have been saved if the mistakes never happened in the first place.
- How does blockchain usher in a more proactive approach to billing accuracy?
With blockchain, orders are accurately rated and mutually endorsed by both the ordering and the billing parties with trusted certification in near real time. In other words, orders are verified at the time they are initiated and before being placed on an immutable ledger. There are no errors to correct later because they are corrected immediately, and orders are optimized for pricing, terms, and conditions before a circuit is ever installed or a bill is ever sent.
- What are some of the drawbacks to blockchain in telecom?
Carriers are largely concerned about security and data privacy. They don’t want pricing information and other sensitive data published in a public space. So, until recently, blockchain solutions have been private environments between only two carriers. These private blockchains, however, are extremely expensive to build and require in-house blockchain expertise, which most carriers don’t have. They also are not scalable; carriers must stand up a new private blockchain for each new carrier they want to add to the environment.Another concern is that a lot of blockchain companies don’t know telecom and telecom companies don’t know blockchain. The last thing anybody wants is for bad data to be put on an immutable blockchain ledger.
- How is the industry removing those obstacles?
With the recent development of zero-knowledge proofs, or zero knowledge Ethereum Virtual Machines (zkEVMs), the security concerns related to public blockchains are virtually eliminated. With zkEVMs, each organization on the blockchain houses its sensitive data in its own secure environment. The only thing publicly published on the blockchain is a zero knowledge proof or tag to the data that allows both parties to the contract to mutually endorse the rates, terms, and conditions in a trusted, secured and certified way. The zero knowledge proof itself contains nothing that could compromise either party’s sensitive data.For all of this to work, there needs to be a level of standardization and automation in the industry. Standard APIs for ordering are critical. And smart contract logic must be built and codified for every service and contract vehicle in an organization’s embedded base. If that embedded base is large, this work can be extensive. But it is self-funded by the savings generated by automating real-time order rating and optimization of contract vehicles.
The involvement of trusted third parties is helping drive the necessary advancements in standardization and automation to ensure the accuracy of new telecom blockchain ledgers. Partnerships between organizations like MEF, which offers standardized APIs and expertise in the technology implementation, and others with deep telecom expertise will be critical to guiding the process forward.
- Does blockchain have other use cases in addition to ordering and real-time rating?
The first pilot use case for public blockchain is for SLAs. MEF Project Wolf Town leverages smart contracts to automate SLA credit reports and enforcement. Right now, carriers and enterprises expend a lot of time and resources trying to determine if and when outage credits are due when SLAs are not met. The public blockchain automates the process and provides one source of truth to which both parties can agree.
- What are the first steps an organization should take to move toward blockchain?
A full implementation of blockchain requires changes to existing systems and processes, which can be time consuming and expensive. So, it’s best to approach blockchain a phased way.
Phase 1 Rating of all historical orders for current embedded base of off-net telecom assets. Phase 2 Real-time rating and correction of orders. Phase 3 Blockchain solution using MEF LSO APIs to order and mutually endorse off-net assets.
Organizations can start by joining MEF if they are not already members, so they can take advantage of industry standardization and be privy to conversations and opportunities as blockchain continues to evolve.
Building out smart contact logic is another great step, especially as it funds itself through the savings generated. Companies can also consider joining a live use case with MEF, which will result in additional financial benefits that can help fund further phases in blockchain.
Listen to the podcast, “Blockchain, Unchaining the Blocks to Accurate Billing and Ordering” to dive deeper.
To say that the recent advancements in blockchain in the telecom industry is a career dream come true for me only hints at the excitement that we are feeling at SIB, Sage Management, and MEF at this critical moment in the industry’s history. I encourage you to take a listen to the podcast and hear all the details of my conversation with Pascal. The future of blockchain in telecom is truly at our doorsteps. And, in Pascal’s words, the outcomes and benefits will be massive for everybody involved.