Digital Disruption in Telecom, Part 2: The Power Shift of Digital Identity and Blockchain

This is part two in a three-part series on digital disruption in the telecom industry. Read the first installment here and stay tuned next week for the third and final installment.

The GSMA defines digital identity as “the electronically captured and stored credentials that uniquely identify a person.” in other words, your digital accounts are what make you you online—no one else has your phone number, email address or social media profiles.

The idea behind digital identity is to link all your digital accounts into one universally verified account. Many solutions use a combination of static data like phone numbers and passwords, along with other data inputs like biometrics and digital footprints, for identity verification. Once you’ve logged in, you can access any other linked digital account without logging in again. It’s more convenient—but because of its universal aspect, it also needs to be more secure.

Any digital account—especially one that centralizes control of several other accounts—is at risk of being compromised. According to the Breach Level Index from Gemalto, over 3.3 billion customer records were compromised through data breaches by mid-year 2018. High-profile data breaches like Experian in the United States have left consumers doubting the security of their digital information.

That’s where blockchain comes in. According to Gartner, blockchain is “an expanding list of cryptographically signed, irrevocable transactional records shared by all participants in a network.” Transactions are independently verified by parties along the blockchain instead of being verified by one institution, and can be traced back to any event in the chain. This makes it far more secure than current models because there are multiple points of verification.

Several countries have already started to apply blockchain to digital identity, like Estonia, the United Kingdom, Ghana, Kenya and the United Arab Emirates. In Estonia, each citizen is assigned a state-issued digital identity, and can access government services online that are secured by blockchain.

And mobile has become a key part of digital identity. GSMA predicts that mobile will be a leading digital identity solution, as 3 billion people will choose mobile as their primary source of identification. In fact, in Estonia, citizens can buy a car on their mobile phone and have it delivered to their home.

So how does this relate to our conversation about eSIM and the Internet of Things last week? Well, in the first blog of this series, I talked about how SIM cards are being virtualized into eSIMs. And your eSIM contains one key aspect of your digital identity—your phone number. Consumers will be able to use their mobile phones to authenticate who they are and sign up for a service without having to physically go into a store, because they can digitally verify their identity.

Mobile phones may be the consumers’ choice when it comes to digital identities, but you don’t have to be a human to have a digital identity. For example, when your car pulls into your garage, your car could have an identity, your garage could have an identity, and your garage should open for your car, but not for your next-door neighbor’s car.

As a result, you’re a truly digital citizen in control of what devices you securely connect and the networks you connect to. You can securely link your banking details, your phone, your eSIM, all your personal details to your blockchain. And because the eSIM is on your mobile phone, you can control all of this information securely through your eSIM smartphone.

Sounds futuristic, but in fact, the convergence of these four trends has already started happening, leading to digital customer experience 2.0. We’ll break that down in our final blog post next week.