How blockchain is streamlining roaming contract agreements for the 5G and IoT era

As operators around the world launch 5G and IoT, their roaming departments face complex challenges. Since these technologies require multiple new agreements with existing and new roaming partners. Still, there is a smart way to deal with all this. Here, Shamit Bhat, GSMA’s Interoperability Solutions Director and Blockchain expert, shares how emerging technologies such as blockchain, are rewriting the rules for roaming contract agreements.

A major rehaul for the roaming agreement process. Thanks to secure automation.

Today’s key challenges in the bilateral roaming agreement process, are due to manual and paper-based methods.. For instance, issues with identifying the right monetisation models and delays in agreeing contracts. As well as downstream synchronisation. All have led to disputes, bad debt situations, and sub-optimal revenue recognition.

Significantly, with the use of machine learning and blockchain, operators can now agree contract terms much more efficiently. Moreover, they can share terms transparently, in near-real-time, with all downstream functions. In this blog I will discuss how automation enabled by emerging technologies, will improve roaming contract agreements, and therefore, roaming revenue assurance.

The roaming contract management process

Let’s start by looking at how roaming contract management is currently conducted.

  • Roaming contracts are signed on a bilateral basis between two operators (roaming partners). As well as through a centralised facility – an operator or vendor roaming hub acting as a proxy on behalf of multiple operators.
  • Based on GSMA International Roaming Agreement templates, roaming agreements carry critical legal, technical, commercial, and operational roaming information.
  • GSMA WAS (Wholesale Agreements and Solutions) meetings facilitate operators to negotiate and sign roaming deals.
  • First, roaming managers number crunch to forecast and analyse deal scenarios to hit their monetisation targets.
  • Armed with this data, usually in Excel, they negotiate deal terms with potential or existing roaming partners.
  • Then, once agreed, they sign the deal and share information with relevant downstream functions to kick off roaming operations.
  • This includes information exchange to facilitate wholesale roaming data clearing, financial settlement, and payment processes.
  • The contracts are paper-based, and relevant information is replicated across multiple centralised systems, including those of roaming partners and vendors.

Why do we need to re-look at this process?

Well, it’s been in place for around three decades, and unfortunately, so have these pain points:

  • Sub-optimal: lack of innovation means continued use of paper agreements and Excel spreadsheets. Exerting strain on roaming operations.
  • Lack of automation: it’s manual, labour intensive, and open to errors/misinterpretations
  • No Single Source of Truth: on signing a bilateral roaming agreement, both parties communicate contractual terms to multiple downstream functions, including internal and external teams. This non-synchronicity of contract information leads to multiple sources of truth being created in the value chain, leading to discrepancies.
  • Reduced revenue recognition: lack of ‘single source of truth’ leads to discrepancies, disputes and eventually to a bad debt situation, ultimately reducing revenue recognition.
  • Increased stress of 5G and IoT: 5G and IoT Roaming require operators to sign multiple new roaming agreements. With current team sizes, it will be a strain to run roaming operations optimally, and both technology’s monetisation might take some time to realise.

Why are these pain points still here?

Through its working groups, GSMA has, on several occasions, tried to solve the issue of helping operators better synchronise amongst themselves, their roaming partners, and respective downstream teams. Yet the centralised nature of these processes and systems, along with the multiplicity of their reporting, create multiple sources of truth. Eventually, leading to discrepancies, disputes, and bad debt situations.

How can we address these issues?

With the advent of machine learning, blockchain technology and mature digital signature solutions, it is now possible to forecast and analyse in a smart and streamlined way, agree contractual terms virtually, and digitally sign a roaming agreement. In recent years, GSMA WAS group has been looking into the use of digital signatures for contracts.

How the industry is using blockchain to automate contracts

Blockchain technology helps to create an easily verifiable ‘single source of truth,’ in the form of an executable piece of code – or a smart contract that addresses a key process pain point. Indeed, this makes blockchain an essential technology for innovating the contract agreement process. Consequently, there have been many industry initiatives to develop its use into a viable solution for operators.

  • GSMA DLT group continues to explore automation of contracts through blockchain for the Wholesale Roaming Initiative – more info
  • Operators, such as Deutsche Telekom through their Nomad project, have explored automating contracts through blockchain, as reported in their news pages
  • There have been several industry PoCs (Proof of Concepts) exploring the use of blockchain for contracts – more info
  • Hyperledger Foundation is looking into the use of Natural Language Processing for automating contracts, in a project called, ‘The Use of NLP and DLT to enable the digitalisation of telecom roaming agreements’ – more info

Read more about how blockchain technology is evolving roaming processes here.

What’s GSMA’s vision for Roaming Agreement process evolution?

GSMA envisions automating the end-to-end Roaming Agreement process through its Negotiator service. In particular, operators can:

  • Forecast special deal terms and analyse them for meeting their monetisation targets, using machine learning
  • Add legal prose and contractual obligations to roaming agreements, like Ricardian contracts, for an automated sign-off and execution
  • Use a virtual environment for negotiating, agreeing and digitally signing roaming agreements
  • Create a ‘single source of truth’, ensuring every agreed term is converted into an executable smart contract, using blockchain.

Read more about GSMA Negotiator here.

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