The silent disruptor: how network APIs are quietly reshaping telecoms
Network APIs are set to offer a new frontier for revenue generation and innovation in the telecoms industry. How can operators ensure these APIs unlock the new revenue streams that are promised over the next few years?
APIs have long been powering communication features like SMS two-factor authentication, automated alerts and in-app voice chat. Now, network APIs represent the next big opportunity for telcos seeking new revenue streams and improved engagement with enterprise customers and application developers.
To this end, thirteen household names from the telco world have joined forces to throw their collective weight behind the network API proposition. Ericsson is leading the charge in this joint venture, along with some of the world’s largest telcos – América Móvil, AT&T, Bharti Airtel, Deutsche Telekom, Orange, Reliance Jio, Singtel, Telefónica, Telstra, T-Mobile, Verizon and Vodafone.
Connecting telcos and enterprises is the name of the game – simplifying integration and accelerating adoption by creating an intermediate API aggregator that feeds into other platforms, integrators and developers.
While some operators already employ standardised network APIs, integrating them across the many, many telcos worldwide has proven difficult so far; the joint venture aims “to accelerate the market and to overcome the challenge,” so says Deutsche Telekom SVP Peter Arbitter.
While not intended to be profit-generating itself, the venture seeks to increase the revenue opportunity from the underlying network APIs. The monetisation potential of this is predicted to be in the hundreds of billions of dollars in the next five to seven years, according to McKinsey:
And it’s not just the financial side of network APIs that’s attracting CSPs. TelecomTV’s recent Network APIs Strategy Report quizzed executives from network operators across the world; 62% of respondents believe it’s a “great idea” and a further 25% think it “seems like a good move.”
But while 25% of respondents believe that an API aggregator is the best way to reach developers, 30% think engaging directly with the development community is the best move for network operators.
What are network APIs?
Network APIs serve as crucial interfaces that enable software applications to access the capabilities of networks. Through these interfaces, telecom operators can extend their reach, create new revenue streams, and offer more flexible, customisable services to meet the growing demands of both consumers and enterprises in an increasingly connected world. They act as gateways for developers and third-party services to access various network functions, services and data provided by telecom operators.
There are various examples of standard protocols already used in the telecoms sector and beyond including:
SIP (Session Initiation Protocol): Used for initiating, maintaining, and terminating real-time sessions for voice and video calls over IP networks.
SMPP (Short Message Peer-to-Peer): Used for sending and receiving SMS messages between Short Message Service Centers (SMSCs) and external applications.
WebRTC (Web Real-Time Communication): Used for browser-based voice and video communication, often integrated into telecom services.
In contrast to these, network APIs offer much greater control over the network infrastructure, enabling more dynamic and flexible networking solutions rather than just communications services.
By exposing standardised methods for communication between different software systems and network infrastructure, network APIs can be used for a growing number of use cases, including:
- Subscriber identity
- Location services
- Network quality
- Sending messages
- Carrier billing
The rise of network APIs
At the forefront of this movement are initiatives like CAMARA, an open-source Linux Foundation project to develop and test new APIs in collaboration with the GSMA Operator Platform Group. Launched in February 2022, CAMARA has grown from 22 initial telco and vendor partners to over 1,000 contributors and 396 organisations.
The GSMA also boasts its own Open Gateway initiative, which recently published its portal tracking 15 APIs from 52 MNOs in 27 countries. Currently, the most widely available network API is SIM Swap, which is provided by 36 MNOs, enabling identification of potentially fraudulent SIM swaps.
The benefits of network APIs extend beyond just revenue for operators, potentially benefitting the entire ecosystem:
- For end users: Access to innovative applications and services.
- For enterprises: Enhanced connectivity and network capabilities for business applications.
- For developers: Simplified access to telco network functions.
- For aggregators: Streamlined integration with multiple telco networks.
- For network operators: New revenue streams, and increased relevance in the digital ecosystem.
However, despite all the promise, a number of challenges need to be addressed:
Network capability and coverage
The success of network APIs depends on the ability of telco networks to deliver on the promised coverage and performance, but as things currently stand, too many mobile networks lack true ubiquity, especially indoors and in less densely populated places.
Multi-network reality
Enterprise connectivity often spans multiple network types, including public cellular, private 5G, Wi-Fi, satellite and IoT networks. Applications need to work seamlessly across these diverse environments, requiring a level of abstraction and integration not easily achieved through current API initiatives.
Developer adoption
For widespread adoption, developers may expect to see more cloud-native network infrastructure. However, many telcos are still in the process of transitioning to 5G Standalone and modernising their underlying cloud infrastructure. It may be naive to expect developers, particularly those accustomed to working with cloud giants such as AWS, Google and Azure, to embrace network APIs unless they are on truly cloud-native networks.
To succeed, operators need to move on from just discussing network APIs and platforms, to demonstrating concrete applications and services that genuinely require these APIs, proving the value proposition to developers.
The key to all of this is collaboration with developers and distribution partners, working together to unlock the potential of the network API opportunity for operators, and for the industry to evolve beyond its traditional connectivity model.
There's a need to bridge between multiple networks and vendors, recognising different types and depths of programmability, and mapping to a single simplified API that abstracts the complexity. Operators that have announced implementations need to provide evidence of developer demand rather than just increasing the number of available APIs.
The art of being invisible
Network APIs present a significant opportunity for telcos to increase their relevance in the digital ecosystem and unlock new revenue streams. However, success will depend on addressing the technical challenges to create a truly open and interoperable environment, whilst proving the value to developers and fostering a vibrant ecosystem. Paradoxically, network APIs will be most successful when they are least visible, so embedded into enterprise applications that their presence is unnoticed.
Update [19/11/2024]: Nokia has announced that it is acquiring Rapid, an enterprise API management platform that hosts the world’s largest API hub from various providers.