Telcoin (TEL) | Coin Review |
Telcoin is a cryptocurrency designed to simplify and advance the exchange of digital assets through the use of telecom channels and mobile phones. These channels are provided by mobile networks globally, enabling easy conversion between mobile telecom money, prepaid credit, postpaid billing platforms. Telcoin is used as a medium of exchange which is not only more accessible but also more usable, though its integration into existing payment methods and communication channels. Telcoin is the first project to tap into synergies between the reach of mobile telecoms and blockchain technology. Telcoin does not aim to compete with the existing telecom frameworks but instead work alongside them to provide customers with increased financial flexibility. Telcoin is especially targeting people living in lesser developed nations.
What Problem does Telcoin solve?
Telcoin will initially focus on the remittance market, currently dominated by large players like Western Union. International Remittances are a growing market that Telcoin believes is ripe for disruption. The integration of mobile technologies and crypto could provide a solution to the problems these big players provoke, mainly slow transactions, which can take days if not weeks to go through and high fees, often a large percentage of the amount is lost because of middleman fees. Telcoin enables international payments to be finished within a matter of seconds and with basically no fees, at least compared to their big competitors in this field.
However, the Telcoin roadmap is not limited to the remittance market. The Team plans to leverage their positioning to bring roaming spending (offer tourists access to local currency spending), international aid (facilitating disbursements to underbanked), and online payments in general. Primary Use Cases according to the Telcoin whitepaper:
Efficient Remittances – Telcoin can facilitate easy and inexpensive remittances via Telcoin to and from mobile money platforms, increasing the adoption of Partner mobile money.
Access to Cryptocurrency – Attract mobile customers interested in easy access to
cryptocurrencies, a rapidly growing demand. Increase e-commerce options for underbanked.
Network Prepaid Airtime Top-up – Purchase and transfer of airtime using Telcoin
(denominated in local currency, including any prepaid voice, text, and data promo offerings).
Crypto-backed Card Payments – Prepaid Visa card that spends Telcoin and other crypto assets in real-time and can also be used in supported ATM on the Visa network.
Product and Vision
The platform utilizes a flexible API which helps increase network interaction and participation. Operators can connect to Telcoin through this API, which immediately qualifies them to receive continuous Telcoin issuance. Networks with more Telcoin exchange traffic will earn more. The company distributes its native tokens to mobile networks in a way that allows for incentives to be obtained by every participant within the system. For example, Telcoin tokens will be sent out to telcos at a rate of 5% annually for a period of 10 years following the ICO. This primarily serves as the integration phase during which the native currency can slowly become more acclimated with the mobile market at large.
The Telcoin pricing and exchange API allows interaction with mobile networks, prepaid platforms, postpaid billing systems, and mobile money accounts, via SMS, USSD, REST APIs, and Diameter. To ensure functionality, Telcoin has to be compliant with all existing guidelines for mobile operators across the globe. This means that the platform needs to stay in perfect alignment with international telecom regulations. According to the Telcoin website, this is currently the case, but it also reveals one of Telcoin’s biggest weakness: Telcoin’s business model is highly dependent on Telecommunication companies. A lot of resources are required to engage with Telcos where the sales cycle is at least a year. Telcoin states on their Whitepaper – “If telecoms for some reason would decide to stop cooperating with us, this could seriously impact our business growth rate and endanger our company’s future.” It is great to see a company being so aware of the dangers that their business model could face. My concern is less with Telcoin, and more with the industry they are operating in.
However, it should also be noted that Telcoin has teamed up with some of the world’s major network providers, and has thus established an infrastructure that can support approximately 5 billion users. Telcoin will begin with a proof of concept (POC) trial agreement to demonstrate how direct connection and cooperation will enhance the user experience, expand possible use cases, quantify the amount of Telcoin issuance that the operator would receive, and provide an executive summary of the overall business case. This provides a promising baseline for further adoption of Telcoin and its product. The company says that in the coming future, they expect to roll out their own wallets that will collaborate and work in conjunction with any administrator or outsider payment platforms.
The project is led by Claude Eguienta who also serves as its CEO. According to his LinkedIn profile, Claude has been working with distributed systems and cryptocurrencies for over seven years now. He has also been associated with many high-profile startups in the past including CyberAgent, Kabotip, and TenX. Paul Neuner is the current chairman of the company. He has been in the telecom sector for over 12 years and is the person responsible for Mobius, a fraud management solution that is currently used by companies such as Ooredoo and Etisalat. Lastly, Simo Kinnunen is the lead developer for this platform. He describes himself as a full-stack programmer who has also served as a back-end dev for many crypto projects in the past.
According to their website, the team consists of 11 members with various backgrounds. Telcoin’s advisory board is filled with people from the banking and telecommunications sector.
Tokenomics: What is the TEL Token?
There won’t be any mining happening for Telcoin. Half of all tokens will be released to the market throughout the following five years. The ICO has made the beginning. Where 25% of the tokens where distributed. 5% of the aggregate is to be saved for the reward of every one of the individuals who has taken an interest in the Presale of Telcoin. TEL can only be obtained by purchasing it, transferring it or receiving it through the reward system. The total Telcoin supply will be composed of 100,000,000,000 coins, 34.904.447.575 TEL are currently in circulation. The total supply seems extremely high, but in the context of what level of adoption the Telcoin team is trying to achieve, it makes sense to have a high number of coins on the network.
Growth potential and Roadmap
With over 5 billion devices and over 800 GSM licensed telecommunications networks available, the global telecommunications industry is huge, and I think we don’t have to dig further into this part of Telcoin’s business to see the potential. If we look at the first primary use case alone, we notice that there is also huge market potential, waiting to be captured: market studies have revealed that this crypto domain holds the potential to bring in at least $500 Billion in “International Remittances.” There will be a growing need for fast, cheap global transactions through mobile devices in the future. Telcoin taps into a growing market, which is far from being saturated. This might put Telcoin in the position as one of the crypto projects with the most significant upside potential in the whole space.
Telcoin’s business model is entirely dependent on Telecommunications networks adopting and integrating the technology into their own. The stronghold that current networks have on their users is significant, they may not have a lot of reason to adopt this type of technology at this point. On the other hand, the upside potential in this market is huge, as we discussed before. Furthermore, the team seems well aware of the challenges their business model could face in the future. Therefore I view Telcoin as a high risk, very high reward investment. If adoption occurs as planned and telecommunication companies are willing to integrate the system, Telcom is bound to be successful, all of this could take some time though. Investors should have a lot of patience with this project, but the reward could be huge.
TEL scored 51 out of 76 Points in our evaluation program.