Telco Asset Marketplace
TMForum is a non-profit industry association with the mission to drive the digital transformation and thus the future growth of its partners from the telecommunications sector. In short, TMForum paves the way for its partners to explore new technologies and business models.
In May 2019, TMForum unveiled a project called “Blockchain-based Telecom Infrastructure Marketplace” with the intention to use distributed ledger technology to create a telecom infrastructure marketplace. This marketplace is expected to help create more agile, flexible, and on-demand business and procurement models, allowing companies to communicate and transact directly with each other by eliminating intermediaries. In addition, the marketplace is expected to help build trust and transparency across value chains and ecosystems between players.
The two major communications service providers (CSPs), Orange and Vodafone, have outlined the business challenge and are working with participants Infosys, IOTA, Nokia, and r3 to solve it, in addition to also working with Stanford University to research smart contracts. Two use cases are of particular interest to CSPs, these are: Expanding existing infrastructure or acquiring capacity for a temporary event (e.g., large-scale events) and opening business opportunities in a country (or location) where there is no or incomplete infrastructure.
Detailed description of the problems to be solved
All large CSPs nowadays provide their own required infrastructure to sell their services to the end user. These are for example assets like cell towers, WLAN infrastructures, frequency bands, fiber networks or even aerial drones at large events. All these assets are needed to establish connectivity, even in remote rural areas with few potential customers.
The problem in these rural areas is that the infrastructure provided is not fully utilized, which means that the revenues from having not enough customers do not cover the ongoing operating costs. In urban areas, it is sometimes the other way around, where the CSP may have overestimated the capacity of its infrastructure, resulting in networks collapsing under the flood of data. This often happens when special events such as major sporting events, music concerts or festivals take place. Anyone who has ever tried to send a photo during major events may already be familiar with this problem. This under- and overcapacity is mainly due to the separation of the network infrastructure of the different CSP. Each CSP exclusively lets its own customer base use the network infrastructure.
Not only the missing infrastructure is a problem for CSPs.
For the use cases already outlined, facilities or assets need to be procured or leased from various players in the country / territory concerned (e.g., tower or spectrum providers). Due to the lack of trust between the involved actors and the fact that there are usually no long-term relationships or commitments between the companies, such transactions are practically impossible and cannot be solved by the CSPs without a very large effort.
DLT is inherently based on immutability, transparency and is traceable to any actor. This creates trust and enables instantaneous transactions. These characteristics are predestined for solving the described use cases. Therefore the goal of the project is to find the necessary infrastructure for the CSPs and be able to deploy it quickly and with minimal effort while providing a service that meets all the requirements of the customers.
IOTA wants to solve all these problems with the “Telco Asset Marketplace”
In such a marketplace, all the described assets (network infrastructure) could be offered by different providers for potential buyers. Increased flexibility in this distribution process would definitely stimulate and benefit the market. A new business model also emerges in which two new types of stakeholders appear, the sellers of unused capacity of their own network infrastructure and the buyers who buy up this unused capacity in order to be able to offer their own customers the contracted services at any place and at any time.
The seller does not have to be one of the large CSPs; it can be anyone who can develop and deliver a mobile service. This is a good opportunity for small and medium-sized companies offering innovative transmission technologies to provide their services to a larger customer base in a straightforward way. Especially with the new 5G networks and the accompanying service-based architectures, the concept of “Infrastructure as a Service” will be a future innovation driver.
What are the major benefits of such a marketplace?
By sharing assets (network infrastructure), CSPs can reduce their ongoing operational costs by flexibly selling or buying additional capacity as needed; underutilized assets are no longer a problem for CSPs.
Large events or future events that require a large mobile Internet bandwidth (virtual reality, augmented reality) cannot be handled by today’s CSPs with their own network infrastructure in most cases alone. Moreover CSPs and also the event organizers cannot afford to provide the required infrastructure temporarily and ad hoc. However, the situation could change if various CSPs or other service providers offer unused spectrum, cell towers, drones and WiFi infrastructure for sale on this marketplace for a limited time.
In countries with insufficient network infrastructure, CSPs could buy services to provide a network without dead spots.
Why does such a marketplace need to be decentralized?
Without the decentralized IOTA technologies, each CSP with today’s digital capabilities could build its own marketplace where service providers can search for and request the resources they need. However, as each CSP then creates its own marketplace, the resulting fragmentation, will negate the benefits of a single marketplace. Offers would have to be published and searched on different marketplaces, and the results from different platforms would have to be processed and evaluated. This significantly increases the complexity of identifying offers. In addition, the required payments would be made across different systems; increased administrative effort and higher costs must then be expected due to the many different accounts.
Instead of fragmenting, there needs to be a marketplace that is shared by all CSPs but owned by no one. A transparent, open marketplace with permissionless access for all, where both assets (network infrastructure) and service providers publish their offers and requests, and where automated matching and payment processing with tamper-proof audit trails are provided.
This will mainly provide the following benefits:
- Real-time bids and requests and optimal asset allocation (network infrastructure).
- Reducing the ongoing fixed costs of each asset and thus maximizing the ROI (Return of Investment) for asset providers
- Always the best asset selection for service providers
- A unique payment system via IOTA tokens to accelerate access to assets
- An easy-to-audit audit trail and quick release of usage agreements, also easy for accountants to control
However, there are also obstacles to the development of such a versatile market. First, the lack of trust and difficult accountability over who is providing what, under what conditions, and who is accessing it. Second, the distribution of revenues and the tracking of liabilities in case of abuse. To overcome these obstacles, the IOTA-based Telco Asset Marketplace was developed.
Last Updated on 16. February 2021