Three big telecom operations in China are now looking at blockchain technology at least two factors. The first one is to boost its network security and the second is to cut down its operational expenditures. The three are joining a project for this specific purpose that will drive wider initiatives leading to the technology development that is behind the digital currencies. This also suggested that the country is moving closer and closer towards the technology despite banning digital coins last year.
China Telecom, China Unicom, and China Mobile are the three big telecom service providers joining hands in creating a Trusted Blockchain initiative of a research body. Such an organization is known as China Academy of Information and Communications Technology (CAICT) that will come under the Industry and Information Technology ministry. Their focus will be on applications based on blockchain platform in respect of sharing data from the internet of things (IoT) networks apart from identity verification of client. These are meant to cut down their operational expenditures, South China Morning Post reported.
A statement indicated that the biggest telecom equipment supplier in the world, Huawei Technologies, will assume the deputy head role for the project. A former engineer of Huawei, Allen Li, thinks that 60 percent of telecom service providers would use blockchain technology in the next 3 – 5 year period. He is now a co-founder of QLC Chain, a blockchain startup from Hong Kong, and is engaged in creating procedures for decentralized mobile network operations. There is renewed interest in China for the technology after slapping a ban on ICO last year.
According to the statement, “Blockchain will not only help telcos lower operational costs for things like user identification, billing, and content delivery network, but it will serve as the best solution to improve network security.” There are other companies who are involved in the government-supported telecoms blockchain platform such as the ZTE Corp network equipment supplier, Union Mobile Financial Technology, payment services provider, and ChinaNova and Qulian Technology, startups.
CAICT’s spokesperson did not want to disclose any more information on the project. Similarly, the three telecom service providers also failed to provide any additional details. Ahead of the 5G mobile infrastructure roll out, the three telecom service providers see the blockchain project as a critical one. The 5G launch could happen in the upcoming years.
Security and Costs
The telecom service providers are looking at enhancing the network security while driving down the operational costs for the upgrade of the mobile infrastructure. As the main supplier of 5G network gear, ZTE and Huawei participation in the project demonstrated their importance in it. The technology allows online database network creation where every participant would engage in not only creating but also sharing and storing of the transaction record in an efficient and secure manner.
According to a Hong Kong Monetary Authority’s white paper, the initial applications include cross-border fund transfers, record checking and management and post-trade settlements. In April, the CAICT introduced the initiative of Trusted Blockchain project to explore its use cases in insurance, intellectual property rights, and supply chain.