• The potential for telcos to drive new engagement and revenues from exposing their network APIs is a hot topic
• It was the subject of a great panel debate at the DSP Leaders World Forum event in Windsor
• The consensus of the industry experts is that the only way to find out what impact this might have on business models and customer engagement is to just get started

WINDSOR, UK – DSP Leaders World Forum 2024 – Exposing network APIs offers telcos the opportunity to develop new business opportunities and generate new revenues, especially as generative AI (GenAI) applications become more widely used, but the time for talking is over and the industry just needs to collaborate and get on with it!

That was the main takeaway from the ‘Unlocking platform opportunities with network APIs’ session here in Windsor that was co-hosted by Laurent Leboucher, group CTO and senior vice president of Orange Innovation Networks, and featured speakers from Amazon Web Services (AWS), Deutsche Telekom, the GSMA, Liberty Global and Neos Networks. 

The topic of the potential value of the network API sector was discussed. There have been eyebrows raised at a report from consultancy McKinsey, which claimed $300bn can be generated in new revenues from telco network API exposure. 

But that figure isn’t quite what it seems: In its report (commissioned by the GSMA) on the sector, what McKinsey stated was: “Over the next five to seven years, we estimate the network API market could unlock around $100bn to $300bn in connectivity- and edge-computing-related revenue for operators while generating an additional $10bn to $30bn from APIs themselves,” so that $300bn number relates to the high end of direct and associated revenues. The report added: “But telcos won’t be the only ones vying for this lucrative pool. In fact, with the market structure currently in place, they would cede as much as two-thirds of the value creation to other players in the ecosystem, such as cloud providers and API aggregators – repeating the industry’s frustrating experience of the past two decades,” it added.    

That up to $30bn is still quite a big number, of course, even over years and spread across the industry, and that figure might be a bit optimistic, noted Peter Arbitter, SVP of portfolio and product management at Deutsche Telekom. He says the German operator believes the potential value to telcos over that time period is likely to be in the region of $8bn to 10bn. 

All of the speakers agreed that it’s too hard to accurately predict how the market is going to develop. What is known right now is that a lot of operators (49 operator groups representing 241 networks) are supporting the GSMA’s Open Gateway initiative that aims to give the sector a unified way to expose their APIs and that the best way forward right now is to start offering up standardised APIs to application developers and see what takes off. “We just need to get out there and do it – we could argue about the value, and who might make the money, for years,” noted the GSMA’s CTO Alex Sinclair.

The operators on the panel were behind him and value the work done by the GSMA: Liberty Global’s VP of core network strategy, Max Gasparroni, noted that there is a lot to still figure out but added that the opportunities to develop new services are real, as the company has shown with its impressive trials at the Port of Antwerp, noting “we are onto something here and [are] so glad that the GSMA has taken the lead.”

Session co-host Leboucher is also optimistic about the potential and noted that the industry needs to learn lessons from past API initiative failures (think OpenAPI) and focus very clearly on the emerging use cases rather than the APIs themselves. He is particularly excited about the impact of generative AI (GenAI) applications, such as Chat GPT 4.0, which is multimodal and will have low-latency requirements because of the near real-time needs of video for virtual assistants and other emerging applications. Quality on demand is something that will need to be offered, noted the Orange executive. 

And it’s not just about low latency – network capacity will also be key, noted Leboucher. But do current networks have the right scale and topology to be able to handle future network API-enabled applications and the demands of drones, smart factories and smart cities? 

“As an industry, we need to look at the situation outside-in. We need to focus on network capacity and the use cases that make sense,” noted Leboucher.

- Ray Le Maistre, Editorial Director, TelecomTV