Blockchain for number portability – Five key benefits for CSPs

With the advent of 5G and IoT, greater collaboration is required between communications service providers (CSPs) in order to cost effectively deliver innovative services, write Ganesan Arulanandham, consulting partner and head of the IP and Innovation COE in the Communication business unit at Wipro, and Subrat Saurabh, principal consultant for blockchain and a telco domain expert, in the Communication business unit at Wipro.

CSPs in a country have numerous areas where their collaboration can result in operational efficiency, cost savings, data security and increased customer experience while they are still able to compete with each other in introducing innovative services, increasing revenues and capturing market share.

While there are multiple opportunities for competing CSPs to collaborate, telcos lack the platform for collaboration. Although national regulatory authorities (NRA) play a key role in bringing CSPs together to achieve specific consumer benefiting goals, a large challenge remains in creating natural collaboration which is often only achieved if a consortium formed with identified objectives. In this article, we will look at how technologies like blockchain can play a role in bringing CSPs together and enabling collaboration.

Blockchain is an emerging technology that will power the next generation of internet and has the potential to transform the world by enabling transparent environments that do not rely on trust. It allows non-trusting parties to transact, trade, exchange information and value without intermediaries in between.

Number portability (NP) is a classic example of how operators across the world provide NP services today, with the help of third party NP service provides. NP is achieved through a complex process and every country has taken a specific approach to implementation. Most countries use a centralised database model where third party providers are involved. Few countries have implemented the distributed database model. The first and foremost challenge in NP is that there are no international standards.

From a consumer perspective, their mobile number has become the primary digital asset and identity, which they need to retain forever as their digital world transactions depend on it. They can’t be locked to one telco and must be able to switch operators as they prefer. Hence it becomes an important service that needs to be enabled by operators and enforced by the national regulatory authorities (NRAs).

In number portability operations, information exchange was possible between CSPs directly or via intermediary, but financial transactions or value exchange were not possible or easy. With the evolution of blockchain technology, information and value can be exchanged securely, transparently while the porting process itself can be simplified, all without an intermediary.

By making use of smart contracts the NP process can become fully automated by enforcing contract terms and service level agreements (SLA) that the CSPs agree between them. This will not only help to complete the porting process faster, but securely and transparently exchange value such as prepaid balances, unpaid bill amounts and apportionment of charges or costs between operators as agreed.

CSP will be able to reap five key benefits by adopting Blockchain for Number portability.

1. Simplified and faster porting process utilising blockchain collaboration network

The slow speed of the porting process is due to delay in unique porting code (UPC) generation, eligibility checks for porting by donor operator (DO) and central party mediation – such as activation, deactivation and exchange of location routing number between operators. Blockchain with its distributed database capabilities, removes the need for a central party to use peer-to-peer direct connection, enables faster porting eligibility check and allows exchange of information and statues between DO and RO.

2. Securely exchanging KYC/User details directly between telcos

Enterprise permissioned blockchain platforms provide the secure and tamper proof exchange of information between the participants on the chain through private channels. This enables DO to share KYC details directly to RO if DO has the porting out user’s consent.

3. Cost sharing/apportionment, value exchange via Blockchain network

In many countries, prepaid balances are forfeited by the DO when a user ports out to another network. Hence users are forced to consume the balance before porting. With blockchain, monetary value now can be carried forward to RO and settlement can take place between operators. Similarly outstanding unbilled charges can be collected by RO and settled with DO.

4. Reduced NP operational costs, conveyance and routing costs

Blockchain is a distributed ledger technology and allows the removal of an intermediary i.e. Central DB or Clearing house. This directly results in cost avoidance for operators. With each operator having the location routing number in their own distributed DB, conveyance and routing related costs can be avoided as well.

5. Real-time visibility of the process, full transparency and auditability for CSPs, regulators and users.

Between DO, RO, regulators and users, the process dependencies can now be monitored in real-time as the process flows through the blockchain network. The statues are registered in the ledgers and become fully auditable. Regulators will not only have full visibility but will have the power to enforce regulatory rules, such as a penalty for porting delay).

Telecoms regulators have already started to look at Blockchain as a viable technology for number portability. In 2018, TRAI in India rolled-out consultation papers to address issues in India in which Blockchain technology was explored in order to assist. Ofcom in UK announced that they will be exploring Blockchain for fixed number portability. Ofcom views that centralised DB based Number Portability is expensive for CSPs and is a barrier for collaboration.

Regulators in countries that are currently taking longer duration for porting and charging consumers for porting services, such as in Germany, Austria, Hungary, Poland and others, must look at Blockchain as a collaboration enabler; not only for number portability but to onboard multiple inter-operator use cases of value and information exchange. This transformation must be driven by the regulator by forming a consortium of CSPs in the country.

Regulators in new countries who are yet to implement number portability, such as The Philippines, should consider exploring Blockchain as they have the opportunity to implement a cost effective distributed solution that is simpler and faster, enabling collaboration between CSPs in the country.