# Applying NFTs: Telecoms By [Origins Research](https://paragraph.com/@origins-research) · 2022-07-02 --- ![https://twitter.com/S4mmyEth](https://storage.googleapis.com/papyrus_images/11b3e9657611115ec26f6b688961e66b9abd439e2bc30fa457b085f762e93178.png) https://twitter.com/S4mmyEth Blockchain technology, including NFTs, is relatively new. The technology derives value from the network and promotes a secure, transparent means of interacting between those participants on the network. Many Telecommunication companies (“Telecoms”) or Communication Service Providers (“CSP”) derive value in a similar way; connecting people globally across a network. [Metcalfe’s law](https://medium.com/pm101/metcalfes-law-and-why-you-should-keep-it-in-mind-9a3b217226fc) dictates the larger the network, the greater the value proposition due to the greater number of touch points in the network. While calculating the value of the network is not an exact science, Metcalfe states a network’s impact is the square of the number of nodes in the network. There are several large players within the Telecoms industry, but scaling securely can be a challenge and that’s where blockchain and NFTs can help. This article focuses on NFT use cases within the Telecoms sector. First we will review the existing challenges in the industry, before covering potential solutions from NFTs and blockchain technology. Article Outline: ---------------- * Industry Background * Industry Challenges & Blockchain/NFT Solutions * Real World Case Studies * Risk Considerations * Closing Remarks Industry Background ------------------- The Telecoms industry evolves continuously in transferring data globally in the form of words, voice, audio or video. There are several key players who cover the main sub sectors (telecoms equipment, services and wireless communication). The following 10 are the [largest by market capitalization (July, 1st 2022)](https://companiesmarketcap.com/telecommunication/largest-telecommunication-companies-by-market-cap/): ![Source: https://companiesmarketcap.com/telecommunication/largest-telecommunication-companies-by-market-cap/](https://storage.googleapis.com/papyrus_images/ff194a96a7098765528cd305581dd4e0c336b23a8562d48640d567b0ca65f4e4.png) Source: https://companiesmarketcap.com/telecommunication/largest-telecommunication-companies-by-market-cap/ Putting things in perspective, the top five CSP individually have a larger market cap than [Ethereum](https://ethereum.org/en/) (July 1st, 2022 - [$128B](https://coinmarketcap.com/currencies/ethereum/)). All fundamentally function in a similar way insofar as transferring data across a network - Telecoms being centralized corporate networks and Ethereum decentralized infrastructure with numerous applications built on top. According to [Bain & Co](https://www.bain.com/industry-expertise/telecommunications/), Telecoms generated the least value to their shareholders during the COVID-19 Pandemic when compared to other sectors. While the industry is essential to many businesses the investment performance of the stocks are struggling and that’s where innovation can fit in to improve consumer experience and also deliver value back to shareholders. ![Source: https://www.bain.com/insights/telcos-in-2021-challenges-are-back-with-a-vengeance/](https://storage.googleapis.com/papyrus_images/1ebbe97f436473d90d397f88081d233e2c951cebf7e40c9bcba5c4471f79a782.png) Source: https://www.bain.com/insights/telcos-in-2021-challenges-are-back-with-a-vengeance/ According to an [Accenture survey](https://www.accenture.com/_acnmedia/pdf-101/accenture-blockchain-wheres-the-value-for-telecoms.pdf) of executives across 20 industries and 27 countries, 19% of communications industry respondents ranked distributed ledgers/blockchain as the technology they expect to have the greatest impact on their organizations over the next three years. ![Source: https://www.accenture.com/_acnmedia/pdf-101/accenture-blockchain-wheres-the-value-for-telecoms.pdf](https://storage.googleapis.com/papyrus_images/72186ebd85fe3460ee0c0415254b4ddf53c3486fdefeccc15878c07e6963bee6.png) Source: https://www.accenture.com/\_acnmedia/pdf-101/accenture-blockchain-wheres-the-value-for-telecoms.pdf The industry is already seeing significant disruption from technology via [Starlink global](https://www.starlink.com/business) CSP. This entity was founded by entrepreneur [Elon Musk](https://www.forbes.com/profile/elon-musk/?sh=42d16897999b) and is already challenging some of the large established telecoms networks. Their [unique selling point](https://www.teslarati.com/spacex-starlink-50-percent-usa-adoption-survey/) being faster connection for a small premium in price over your average provider. ![Source: https://www.starlink.com/business](https://storage.googleapis.com/papyrus_images/491634cdd0ade045127d3f19567e0710fcbb95f2c7dfbf401fea28b3a7079e4e.png) Source: https://www.starlink.com/business Technology is front of mind to maintain an edge competitively. Carriers’ infrastructure is becoming lighter, with a large move into wireless technological as advancements have enabled network user experience to rival that of wired connections. Despite the private company disruption there remains significant funding from governments. According to the [Deloitte 2022 Telecom industry outlook report](https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/telecommunications-industry-outlook.html), there appears to be a shift to a more decentralized government broadband infrastructure funding in the US. The [$1T Infrastructure Investment and Jobs Act (“IIJA”)](https://www.congress.gov/bill/117th-congress/house-bill/3684/text), passed in November 2021, earmarks $65B for continued broadband adoption. Despite poor sector financial performance there is significant government support given how vital the underlying infrastructure is to the success of most other industries. The sector’s poor performance can be attributed to a number of challenges. From difficulties in augmenting & securing the network, data breaches and customer or brand loyalty - All of these present headwinds for the carriers in improving their bottom line and strengthening their financial positions. This article will take a look at these challenges and provide corresponding blockchain / NFT solutions. Industry Challenges & Blockchain/NFT Solutions ---------------------------------------------- These solutions are general in nature and hence would need to be tailored to the specific type of telecoms product offering, business model and size. The more complex listed CSPs may require a more robust process which could take a longer lead time to implement when compared to a small start-up carrier which tends to be more agile. ![](https://storage.googleapis.com/papyrus_images/f600806ea79924bf1fefb892d32bf4d78abb71591fa73d3faecfa13ecbb2a2e6.png) ![](https://storage.googleapis.com/papyrus_images/655a5893c9c29689be12ff587775f70ab18edb00ea2310906f8c45a1f17cd553.png) ![](https://storage.googleapis.com/papyrus_images/7b40fd255e9ac5310381b0ee7e31e9472ec2db817316f9da447864984d9898a1.png) ![](https://storage.googleapis.com/papyrus_images/7d7061adfab6d1b96de14409dfed83ec4a64ebdb31dbc595c511045e9f3ab769.png) ![https://chat.blockscan.com/start](https://storage.googleapis.com/papyrus_images/4bcbf4c50f326669cacddaf149a5e78a82973630146afb3b3193c8ffec4ac7d2.png) https://chat.blockscan.com/start ![](https://storage.googleapis.com/papyrus_images/3c1fe79a9fe18f608afe8ff1a2496e3d52b2974b2fb9c6ba391a185887b80091.png) ![](https://storage.googleapis.com/papyrus_images/61c80747aecb8415bb86572609acce8985d695e506c8704e9023dd18bdfe775a.png) ![](https://storage.googleapis.com/papyrus_images/0a8c5295955ecdd2ddc20c3ddce1195006c7657f83d22cc274dac8ae93f30529.png) ![](https://storage.googleapis.com/papyrus_images/7214a8d16ef6d89ae0d708cab55ae79a6177c20e757a196acfc6ae295bc89174.png) ![](https://storage.googleapis.com/papyrus_images/6c635eafda6834f084eb454117d345fd0a34a7fa5162f5358a55593fd6359d43.png) Real World Case Studies ----------------------- **1/ Carrier Blockchain Study Group (“CBSG”):** This organization consists of CSPs from across the globe exploring the potential to build a next-generation, cross-carrier blockchain network. The consortium is expanding and innovative solutions coming to fruition. The consortium includes the following members (including large names like [Telefonica](https://www.telefonica.com/en/), [Etisalat Group](https://eand.com/), and [T-Mobile (formerly Sprint)):](https://www.sprint.com/en/shop/cell-phones.html?credit=A&sort=FEATURED) ![Source: https://sites.google.com/tbcasoft.com/prod/blockchain-consortium](https://storage.googleapis.com/papyrus_images/737ec18e4b423f6f285e767490100416e2e69b8d6ae104ded2735a0788b3ca0a.png) Source: https://sites.google.com/tbcasoft.com/prod/blockchain-consortium Their cross-carrier blockchain platform intends to develop mobile wallet roaming, international remittances, [Internet of Things (“IoT”)](https://www.oracle.com/uk/internet-of-things/what-is-iot/) payment and charge settlements with top-ups. A key objective includes improving the level of safety and security of data across the mobile giants, particularly with hacking become a more frequent issue. **2/ Solana Mobile:** ![](https://storage.googleapis.com/papyrus_images/ab469a0cc4efc75de388f5b8514b27183398cc1ae0a0f510cf9947b21d5e72ed.png) [Solana Mobile](https://solanamobile.com/) (subsidiary of [Solana Labs](https://www.linkedin.com/company/solanalabs/)) introduced Saga, a flagship [Android](https://www.android.com/intl/en_uk/) mobile phone with unique functionality and features tightly integrated with the Solana blockchain. The aim is to make it easy and secure to transact in web3.0 and manage crypto tokens and NFTs. ![Source: https://solanamobile.com/](https://storage.googleapis.com/papyrus_images/6f3b8940b44eff0633181dc16ea813678740e0f3ad9c764257572e9db5cc1c49.png) Source: https://solanamobile.com/ The current web3.0 infrastructure is clunky with applications like [Metamask](https://metamask.io/) or [Phantom](https://phantom.app/) lacking an intuitive user friendly experience. This is the first move into a mobile phone market by a web3.0 native entity, and while risky, could be a huge payoff if it is able to encourage the masses to adopt the new technology seamlessly. With almost 7 Billion people using mobile phones globally and 100 million people using digital assets, there is huge growth potential if there is a good product market fit. ![Source: Statista](https://storage.googleapis.com/papyrus_images/8c8c78f4bcfc2a645d1edc49dfe7237568601445a683bdbabb313a40531488ee.png) Source: Statista **3/ AT&T:** [AT&T has forged partnerships](https://about.att.com/story/2018/att_blockchain.html) with leading blockchain vendors, [Microsoft](https://azure.microsoft.com/en-gb/solutions/blockchain/#overview) and [IBM](https://www.ibm.com/blockchain/solutions/food-trust/food-industry-technology), in order to develop a blockchain based mobile authentication initiative. ![](https://storage.googleapis.com/papyrus_images/27cdb7e29d5c02ebc2b0d7610b46cc26188bafbd1b67e84e7888595d5c1f5c9f.png) AT&T is developing a suite of blockchain solutions for B2B customers in the retail, manufacturing, and healthcare industries. These include: * Manufacturing - Supply chain tracking of products. * Retail - Product tracking from order to delivery, thus reducing waste and excess stock. * Healthcare - Maintains and allows highly-secure sharing of directories of up-to date patient records. **4/ Vodafone (Digital Asset Broker):** [Vodafone](https://www.vodafone.co.uk/) is honing its blockchain strategy with the launch of its new “[Economy of Things](https://www.vodafone.com/news/technology/new-economy-of-things-platform)” platform. The platform is secure using blockchain technology so that all devices and machines connected to Vodafone Digital Asset Broker (“DAB”) are verified as trustworthy and then automatically allowed to exchange and trade data over secure and encrypted connections. ![Source: https://www.vodafone.com/news/technology/new-economy-of-things-platform](https://storage.googleapis.com/papyrus_images/191d6ae98e815c94d143a44d8e2ca348c097577e0c6134367b8b13845d608ad3.png) Source: https://www.vodafone.com/news/technology/new-economy-of-things-platform Vodafone DAB has been installed in [Newbury, UK](https://visitnewbury.org.uk/) to demonstrate how motorists can pick the best priced electricity based on location and charge time, and pay for it automatically. This will eventually be built into electric vehicles directly - currently available on mobile applications. Risk Considerations ------------------- * The infrastructure can be costly to implement. There could be significant global, carrier agnostic infrastructure that may need to be implemented in order for Telecoms to thrive on top of the web3.0 tech. However, it is clear that governments ramp up funding for this, with $65B included within the latest $1T infrastructure bill. We can also see that most of the top carriers are located within the USA so will benefit from this funding. * If securitizing mobile phone contracts and numbers then this could lead to increased regulation given the consumer protection or compliance requirements with the [Securities & Exchange Commission (“SEC”)](https://www.sec.gov/). * There are new risks associated with the technology, for example smart contract failure, that did not exist previously. Having an understanding on what this is an implementing appropriate insurance cover can help mitigate this. We touched on [NFT insurance in another OriginsNFT article](https://mirror.xyz/origins-research.eth/eUQdzkuc17TtuWFHaEfj5dh-7FEX4tnXOeVd5w5a8SE). * If surplus data were to be traded on the secondary market then this could result in less control over being able to upsell additional data to existing customers. However, secondary royalties could be baked into this secondary market so lost revenue from additional primary data sales could be compensated by a new form of income generation while also resulting in a more content customer base. This in turn could have a beneficial impact on fewer complaints to call centres and lower administration costs. * There will be a certain level of data sharing with those third parties within the supply chain. Finding a balance of transparency versus losing a competitive advantage will require analysis. This is particularly relevant for those blockchains that are shared cross carrier - there may be synergies from sharing this information that benefits all parties but then a new meta in terms of competition could arise. Being agile to respond to this dynamic environment will be essential to continue succeeding. * [Tascha Labs](https://twitter.com/TaschaLabs) provides an economics lens to [tokenization of loyalty programs](https://twitter.com/TaschaLabs/status/1542583801334747138?s=20&t=FqFar4FXgh75hnv6ABY7RA), including why incumbent web2.0 corporates may be against tokenization of loyalty points. \*“Traditional user rewards programs are essentially discriminated pricing. Charging users different prices by usage level allows firms to capture higher profits (producer surplus). The more fine-grained the price discrimination, the more producer surplus there is. \*\*That’s why airlines don’t allow you to sell your frequent flyer miles. \*\*\* _But that’s exactly what happens if you tokenize a loyalty program. If loyalty points are fungible tokens that can be traded on secondary market. Because although tokens made differentiated pricing impossible, it gives stronger incentive for users to earn rewards since monetary benefit can be immediately cashed out on secondary market. Liquidity makes tokenized rewards more attractive than loyalty points confined in walled gardens.”_ * The space is nascent and hence both customers and employees may take time to understand how the new technology works. Conversely a seamless transition is necessary for mass adoption so providing educational content alongside familiar user interfaces will aid this transition from Web2.0 to Web3.0. * Linking credit ratings to secondary markets for telecoms NFT activity may be a challenge if contracts are taken on by other third parties. The primary customer would need to pay the contract up front and then cede the residual contract at their own risk. This would then prevent the issuing carrier from taking on the residual risk of default, but may need to honour service of the contract to the NFT holder. The responsibilities would need to be agreed up front and be transparent to all parties involved. Closing Remarks --------------- Blockchain technology is on the mind of several Telecoms companies with the [CBSG](https://www.tbcasoft.com/timeline/cbsg-consortium-is-reshaping-mobile-payments-with-cross-carrier-blockchain-platform/) continuing to research how it can be put to use across the Telecoms sector. It’s clear that security, portability (of numbers, data and contracts) and customer loyalty will benefit from the successful implementation of the new tech. But suspect that further innovation will be realized in the coming years as it is embedded into our everyday lives behind familiar web2.0 user interfaces. While there is a key focus on blockchain tech generally, NFT use cases hasn’t yet been fully considered within the telecoms sector. The new form of digital asset offers numerous beneficial properties and will inevitably permeate across multiple industries to varying degrees - it will be interesting to see how it offers solutions to existing industry challenges over the coming years. At [OriginsNFT](https://originsnft.io/) we leverage data-driven decision making, educational resources, and proprietary analytics to remain ahead of the curve with respect to blockchain tech and specifically NFTs. To find out more, please visit our [website](https://originsnft.io/) or [Twitter](https://twitter.com/OriginsNFT?s=20&t=32UYETa5iiqxkDBj0NcVrg). To purchase a pass, please visit our [Opensea page](https://opensea.io/assets/ethereum/0x495f947276749ce646f68ac8c248420045cb7b5e/63763212585141476199723449601564140078511354041472126739157516503384422613942). ![](https://storage.googleapis.com/papyrus_images/e12f880845d6a12d90110640422b60ce7f517cccf703763cacc8661b5d793176.png) --- *Originally published on [Origins Research](https://paragraph.com/@origins-research/applying-nfts-telecoms)*