Use blockchain to improve the supply chain in telecom industry business processes

Part 1 of this series gave you an overview of some of the challenges facing telecommunications and media companies, and we showed you some high-level use cases of solutions built on blockchain that can be created to solve these challenges.

Part 2 provided an overview of a blockchain platform architecture that’s relevant to a communications service provider (CSP) environment, took a deeper dive into some of the earlier use cases, and examined a specific solution that could help you understand how all of the key components come together to provide tangible benefits to the CSP.

Here in Part 3, we take a more in-depth look at a specific use case around using blockchain to manage a CSP’s supply chain, which can be quite complex including multiple parties and systems. You’ll see how blockchain can be used to integrate these parties and systems to effectively manage the supply chain from end to end.

Blockchain supports the supply chain

Blockchain is becoming a standard in the business world, and it supports different players as they rethink enterprises, ecosystems, and economies. Leading companies use blockchain to build trust, transparency, and data synchronization across ecosystems — and to create new business models. All of these are key elements of a well-functioning supply chain, and it is not by chance that supply chain has been the top use case in this first stage of blockchain adoption.

IBM has worked with its partners to successfully develop global supply chain ecosystems. One such ecosystem is Food Trust, which aims to make the world’s food supply chain safer, smarter, and more sustainable. Food Trust uses blockchain technology to create unprecedented visibility and accountability in the food supply. It is the only network of its kind to connect growers, processors, distributors, and retailers through a permissioned, permanent, and shared record of food system data.

The second is Tradelens, which enables digital collaboration across the multiple parties that are involved in international trade. Shippers, shipping lines, freight forwarders, port and terminal operators, inland transportation, and customs authorities can interact more efficiently through near-real-time access to shipping data and shipping documents.

In the Telecommunication, Media, and Entertainment (TME) industry, we initially focused on ecosystems to solve industry-wide issues like roaming settlements, mobile number portability, digital advertising, and copyright management. However, as we talked to our clients, we discovered the need for a solution that could help them digitize and automate supply-chain processes within their organizations and their closest partners. So we started analyzing the different components of telecom products and services, the suppliers behind them, and the end-to-end processes to serve clients.

Our supply chain for telecom accelerator is the result of that analysis and the solution that enables our partners to leverage the trust, transparency, and new business models supported by blockchain to make their supply chains more efficient and their services more client-oriented.

Business value

Provisioning an enterprise telecommunication service that includes IoT devices can be a very complex process. Enterprise customers demand a high level of service to run their businesses, and while the CSP is the only organization that’s accountable for service provisioning, there are many other suppliers behind it (including IoT device manufacturers, other CSPs, field agents, and virtual network function providers).

This supply chain shows several pain points, the first being inefficiencies due to the siloed and misaligned information across partners. For example, the (virtual network function) VNF provider and the IoT device manufacturers have little or no visibility into the lifecycles of their assets once they are deployed. On top of that, CSPs have limited control over the status of critical assets once they have been installed and used by clients. As a result, the risk of theft and modification of IoT devices is high.

Inefficiencies in the order-to-delivery process, limited collaboration between partners, and lack of visibility into how assets are used generate dissatisfaction among customers.

You can address most of these issues by applying blockchain to the order-to-provisioning process and to the following lifecycle management of the services and the assets.

As an immediate result of the process digitization and automation through blockchain, the entire ecosystem gains increased cost efficiency based on the streamlined order-to-provisioning process and the elimination of manual reconciliation activities. (In previous IBM engagements, blockchain-induced cost reduction was estimated between 20% and 30%.)

A second impact of blockchain is full control over assets such as IoT devices through digital identity and integration with IoT platforms; this provides full transparency and visibility over devices, transactions, and the data they exchange. As a result, security is assured to end customers in case of an unauthorized modification of the device or VNF.

Finally, digitization, automation, and visibility over assets and transactions enable the deployment of new services and the creation of new revenue streams. For example, a carrier can become a service provider of integrated IoT solutions or of multi-vendor platforms. In addition, they can enable unique and flexible business models for existing services, thanks to a clear visibility into the cost to serve and the asset utilization of their clients.

Integrating components and capabilities

In order to deliver the end-to-end functionality and manage the full supply chain, this solution integrates three main groups of components:

  • Order capture and customer order management
  • Resource provisioning, inventory, and topology
  • Blockchain

Order capture and customer order management

This component is responsible for managing a customer order end to end, from the order capture (including configuration, pricing, and quoting) to the successful completion of the order (including orchestrating the provisioning of the multiple sub-components). In today’s complex environments, an order can be composed of many different types of orders, including physical resources and traditional telecom resources (such as phone numbers or ports), which we call logical resources — as well as virtual resources, which run as virtual network functions (VNFs) in the telecom network. Orchestrating the full order, managing dependencies between the different resources, propagating order status to front-end components, and providing end-to-end real-time visibility into the order are some of the critical functionalities that are provided by this component. It also includes managing relationships with suppliers and partners. In this solution, this functionality is provided by IBM Order Management.


Resource provisioning, inventory, and topology

While IBM Order Management orchestrates the full customer order, it can delegate the actual provisioning of resources to dedicated systems. For the logical resources described above, resource provisioning systems typically already exist in the telecom operator’s environment and can, for example, activate a mobile bundle (with voice, data, and messaging). For virtual resources, it is a more complex task, and usually involves provisioning resources within different types of physical environments like virtual machines or containers. So it requires a dedicated component, which is able to manage and orchestrate such a heterogeneous environment. IBM Agile Lifecyle Manager enables service providers to simplify and automate the complete service lifecycle, from service design and onboarding to automated operations. IBM Agile Service Manager provides end-to-end, real-time topology of the entire environment.



The order management component provides a service-provider-centered view of the supply chain, but doesn’t actually provide a truly shared and trusted perspective on the whole supply chain to the entire ecosystem. So, integrating the above components with a blockchain-based supply chain management system enables you to deliver the benefits and the business value described above. The full lifecycle for the various types of resources (physical, logical, virtual) is managed in the blockchain from creation (physical manufacturer, software vendor, etc.) to installation and configuration to delivery of the service to the client (who can be residential or enterprise).

The components described above connect together through an integration layer, which can be composed of mediations, business processes, or business rules. The solution is also connected to the service providers’ existing Business Support Systems (BSS) and Operations Support Systems (OSS), including CRM, billing, product catalog, and service assurance.

Use case flow

Figure 1 illustrates the high-level interaction flow that takes place between the different components and partners in the ecosystem.

Figure 1. High-level interaction flow

High-level interaction flow diagram


VNF on-boarding

The first step is to on-board the VNF within the CSP’s network. During this step, the CSP tests and validates that the VNF is ready for deployment within its network from a technical standpoint, but also negotiates the contractual agreement with the VNF supplier. The contract is then stored in the blockchain for trust and transparency.


Order capture and provisioning

An enterprise customer places an order for a voice-over IP (VoIP) service, which includes a virtual service (VNF) as well as a physical IoT device. The order is received by the CSP and split into sub-orders (physical and virtual components).


Device setup and registration

As part of the provisioning process, an order is sent to the IoT Device Supplier to provide and ship an IoT device to the enterprise client. The various steps of the device’s lifecycle are captured in the blockchain.


IoT device connection

Once the device is received and installed, it is configured and connected to the VoIP service, running within the CSP’s network. During this step, the device’s configuration is recorded in the blockchain and serves as a digital fingerprint to verify its integrity at any later time.


VNF modification

At any time, potential modifications to the VNF or the IoT device may be monitored and detected, and appropriate actions are taken (such as healing or blocklisting).

Reference architecture

IBM provides a blockchain reference architecture that can help you design a blockchain application. This architecture shows you how actors such as users and IoT devices interact with a typical blockchain application, which in turn interacts with a blockchain network. This was described in more detail in Part 2 of this series.

In addition to the reference architecture, Figure 2 provides a high-level, functional view of the solution architecture:

Figure 2. High-level interaction flow

Solution architecture

Blockchain model

The blockchain model mainly defines the participants’ roles, the asset objects, and the transactions that are performed for these assets between one or more participants.


Here are the participants defined in the model file:

  • CSP — service provider
  • OEM — physical equipment manufacturer
  • Customer — enterprise customer
  • VNFProvider — virtual network function software provider
  • FieldAgent — vendor providing field services like installation and maintenance
  • CloudProvider — cloud platform provider

Asset types

Here are the key asset types defined in the model file:

Asset Description Key properties Participants
Quote Customer quote created for the requested service; identified by quoteID Offering name, sellerID, list of components (physical, virtual, and logical) Customer, CSP
CustomerOrder Finalized customer order created for the requested service; identified by orderID productID, location, list of service orders, creation time, completion time, total bill, status Customer, CSP
ServiceOrder Service order for individual components and tasks as part of customer order; identified by serviceorderID serviceName, list of components (physical, virtual, or logical), creation time, completion time, bill, status CSP
PhysicalElement Physical hardware elements identified by unique element ID version, type, license assigned, count, and notes OEM
VirtualElement Software element identified by unique element ID version, type, license assigned, count, and notes VNFProvider
PhysicalComponent Physical hardware component that forms part of a service; identified by componentID and encapsulates one or more physical elements List of physical elements, location, last seen timestamp, notes CSP, Customer, FieldAgent
VirtualComponent Virtual/software component that forms part of a service; identified by componentID and encapsulates one or more virtual elements List of virtual elements, location, last seen timestamp, notes CSP, Customer, CloudProvider
LogicalComponent Logical component that forms part of a service; identified by componentID Location, last seen timestamp, notes CSP, Customer
PhysicalOrder Order for physical hardware elements; identified by orderID Physical element involved, order time, completion time, delivery manifest, bill, status CSP, OEM
PhysicalInstall Order for installation and activation of physical component; identified by orderID Physical component involved, order time, completion time, location, bill, status CSP, FieldAgent
RegisterPhysicalElement Registers a physical element upon activation; also updates the component asset with the right configuration present at the device CSP
PresenceDetectedPhyEle Example of an event triggered by the physical component that affects the service and updates are made up the chain CSP, Customer, OEM, FieldAgent
CreatePhysicalElement Creating a new physical element; this is at the OEM’s end OEM
VirtualOrder Order to acquire license for virtual component; identified by orderID Virtual component involved, order time, completion time, location, bill, status CSP, VNFProvider
License License assigned for components; identified by licenseID type, number


Here are the key transactions defined in the business model and managed by the smart contract:

Transaction Description Participants
QuoteCreation Quote creation for customer request; initiated by the smart seller application CSP, Customer
CustomerOrderCreation Customer order processed and finalized by the order management system CSP, Customer
ServiceOrderCreate Creates individual service orders under a particular customer order; triggered and processed automatically by order management system CSP
ServiceOrderUpdate Updates to service orders as the supply chain process moves along; triggered and handled by order management system CSP
CustomerOrderUpdate Updates to customer order as the supply chain process moves along; triggered and handled by order management system CSP, Customer
PhysicalComponentAssign Assigning physical components to the service order and customer order; creates orders for physical elements CSP, OEM
PhysicalComponentAcceptShip Processing on physical element orders as the order is accepted and hardware is shipped; updates element, component status and also the service and customer orders CSP, OEM
PhysicalComponentInstallActivation Processing on physical element installation orders as the order is installed and activated; updates element, component status, and also the service and customer orders CSP, OEM
VirtualOrderPlace Order to acquire software components and licenses from VNF provider CSP, VNFProvider
VirtualComponentAssign Assigns virtual element to a particular customer order; updates virtual element, component, service order, and customer order CSP
VirtualComponentProvision Provisions and activates a virtual component; this is done via a NFV-Orchestrator, in this demo case IBM Agile Lifecycle Manager CSP, CloudProvider
VirtualComponentLifecycle Tracks lifecycle events of a virtual component like heal, scale, configuration, and policy compliance; this is done via a NFV-Orchestrator, in this demo case IBM Agile Lifecycle Manager CSP

As these transactions are being executed in different phases of the of the supply chain and service lifecycles, the corresponding blocks are written to the shared ledger on blockchain (see Figure 3). This is how transaction steps generate blocks on the blockchain instance.

Figure 3 shows the step where an agent completes the installation and activation of physical equipment, triggering the PhysicalComponentInstallActivation transaction; the corresponding block is then recorded on blockchain.

Figure 3. Sample transactions

Sample transactions

You can see the complete solution in the video “Telco enterprise supply chain, IoT, and security.”


A CSP’s supply chain can be quite complex, involving multiple parties and components including physical and virtual products. This article has explained how blockchain is a powerful tool that can be used to manage a supply chain and provide new value-added services such as dynamic pricing and enhanced security with full visibility into the supply chain for all concerned parties.

This concludes this three-part article series on how blockchain can be used to address challenges within the TME industries and provide specific solutions to address those challenges. In many TME companies, revenue growth is declining while costs increase, and blockchain provides an opportunity to address both issues. These benefits are achieved by using blockchain to streamline internal processes, provide new value-added services, and collaborate among business ecosystems. Various use cases were discussed such as linear ad sales, transparent supply chain management, and roaming, fraud, and overage management — which enable CSPs to address these challenges. Implementing these solutions requires integrating blockchain into a variety of internal and external systems ranging from IoT to security to supply chain systems. The results of this include consensus, provenance, immutability, and finality around the transfer of assets within business networks — all of which help reduce costs, time, and risks, and ensures data quality and increased trust.

We encourage you to explore the use cases in these articles to determine which ones are relevant to your environment, and what business value can be derived from implementing these solutions. If the business value is clear, the next step is to identify the underlying architecture and components to implement these use cases. The guidance provided in this series should assist you in your efforts. In addition, you’ll find plenty of helpful resources at the IBM Developer Blockchain hub, IBM’s Blockchain site, or at IBM’s Telecommunications, Media, and Entertainment site to help you along your journey with blockchain for the TME industries.