The secret power of network APIs
A key factor of the digitalization of industries today is centered around customer experiences, the automation of BSS & OSS operations, and back-office operations.
Taking a look at the developments of network APIs, and how this new era in applications, connectivity, and monetization are driving, innovation, infrastructure enhancements and operational excellence.
The use of network APIs offers Providers (SPs) two major benefits. In this blog post, we will dive into the rise of Network APIs and how SPs can leverage them for their benefit.
The rise of network APIs
The rise of application programming interfaces (APIs) for SPs/telcos (telecom APIs) is the result of the digitalization process. This entails that all customer journeys with the service provider take place without human involvement. To automate OSS and BSS operations, multiple APIs are used to execute various telco actions. In other words, APIs have become essential for the whole service lifecycle, including creating, modifying, and ceasing services. With networks becoming differentiated and programmable, application developers have a better insight into the connectivity of their applications.
Network APIs got a major boost from the CAMARA project, an open-source project of the Linux Foundation in collaboration with the GSMA Open Gateway platform. It enables network APIs to have seamless access to Telco network capabilities. This positions the operator community in the ideal position to introduce an ecosystem-wide innovation that will also benefit SPs commercially.
Telco networks and applications
Historically, nearly all applications were over-the-top, thus ignoring the network. As a result, the SP did not receive any income from these over-the-top (OTT) apps running on its network. This has changed since many modern applications and solutions demand more from the network, they run on than before. Some examples of this rising demand are Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence (AI), and enterprise applications such as industrial Internet of Things (IoT) and smart factories. Network APIs enable these modern applications to interact with the network. That’s why network API platforms have started to enable differentiated network control, location, and access to other network services.
How network APIs can generate revenue streams
Let’s move from the operational to the commercial aspect of telecom APIs. These APIs can be a powerful tool for tapping into new revenue streams. Why? Because an SP can expose multiple APIs covering its commercial and network capabilities, and app developers pay the SP for using these APIs in their applications. The network APIs turn the network into a monetizable platform that third-party applications can use to offer richer features and functionality.
The consultancy firm Omdia predicts a surge in revenues from network API, with global revenue projected to rise from $161 million (€148 million) in 2023 to $8.7 billion in 2029, with subscribers’ identity APIs as the main driver. It also points out that apart from generating direct revenues, today's network APIs can drive further revenue through connectivity and newly enabled services.
Let’s have a closer look at how APIs can be a great opportunity for service providers as an additional recurring income stream. Offering network APIs to e.g., continuously enhance the anti-fraud capabilities and security measures of a financial institution, the SP will create an additional revenue stream.
Example: Broadcast event
To illustrate how this looks like in practice, let’s take an outside event broadcast unit as an example. The organizer uses many wired cameras that need faster set-up times, lower on-site staffing, and the increased flexibility of a wireless-based system. A network with tens of cameras operating at full 8K resolution would need high capacity. For this purpose, using network APIs would allow dynamic control of the capacity & quality of the connections at the required times. This would result in less need for capacity, a smaller dimensioned network, and lower overall costs.
Potential pitfalls for API monetization
There are some pitfalls for the successful use of network APIs. Firstly, global & consistent API availability must be guaranteed. Secondly, the application developer platform must have embraced the concept of APIs and platforms, such as Salesforce or Twilio. These platforms have huge developer communities that are creating a diverse range of applications / solutions, resulting in creating new markets and significant revenue growth for their participants.
Recent developments
Having a set of telecom APIs extensively used by OTT application/solution developers is a great opportunity for the service providers. It will provide new API-based revenue streams and engagement with new market sectors. However, the service providers need to get these APIs to market successfully.
To that end, Deutsche Telekom (DT), T-Mobile US, and Hubraum (DT’s tech incubator) recently announced an initiative for developers in the US and EU to use telco APIs to develop new solutions. Their goal is to foster API-driven innovation across industry verticals such as Automotive, Broadcasting, Healthcare, and Manufacturing. In mid-September, major telcos, including América Móvil, AT&T, Bharti Airtel, DT, Orange, Reliance Jio, Singtel, Telefonica, Telstra, T-Mobile US, Verizon, and Vodafone announced formation of a new company with Ericsson to provide CAMARA APIs to a broad developer ecosystem, including hyperscalers, Communications Platform as a Service (CPaaS) providers, system integrators (SIs), and independent software vendors (ISVs).
These examples are a clear recognition that service providers need a common way to expose APIs, and it could help accelerate the market and overcome the challenges developers face in integrating their applications across different service providers.
