Network APIs: Telco traction and IDC’s forecast

• Telco support for the GSMA’s Open Gateway network API initiative grows 
• IDC expects rise in network API revenues over next five years 
• Long-term success dependent on aggregator and integrator support, notes analyst firm

WINDSOR, UK – DSP Leaders World Forum 2024 – Telco support for the GSMA’s network API exposure initiative continues to grow, according to the industry association’s CTO Alex Sinclair, and those operators will be cheered by a new market forecast from IDC that predicts significant growth in network API revenues over the next five years, even if the overall figure isn’t going to move the sales needle for any individual service provider. 

Sinclair headed to Windsor this week to provide an update on the GSMA’s Open Gateway initiative, which defines and prioritises network APIs suggested by the operators, during an on-stage progress report interview with TelecomTV’s chief strategy officer and director of content, Guy Daniels. According to the CTO, 49 operator groups, representing 241 networks and two-thirds of all mobile connections around the world, have now signed up to the Open Gateway initiative to develop their network API strategies. He noted that 28 APIs have now been published and that the GSMA team is now focused on attracting channel partners that can help market the standardised APIs to developers and enterprises, with 12 already signed up.

“We are seeing commercial traction and that’s important, because otherwise we will lose priority and we all know what happens then, and we’re reaching out to developer communities… but if you want to reach the developer community you’ve got to be where they are,” which is at industry events such as AWS re:Invent and Google I/O, noted Sinclair.  

There have been launches in multiple markets over the past year, including Spain, Brazil, Sri Lanka and Germany, and the operators supporting the initiative are convinced that valuable new services, such as the one developed by Liberty Global, digital tech R&D outfit Imec, shipping firm Seafar and Nokia that enables the safe and efficient operation of shipping vessels in the Port of Antwerp, can be created, as we heard during the ‘Unlocking platform opportunities with network APIs’ session – see Network APIs? Let’s get on with it.

That session included a discussion about the value of the network API market, and technology industry research firm IDC has further fuelled that debate with a market forecast of its own.    

It expects revenues generated by the network API sector to grow from just over $700m in 2023 to $6.7bn in 2028, a compound annual growth rate (CAGR) of 57.1% over five years. That’s a striking growth rate but ultimately it would represent only incremental revenue gains for telcos when split across all of the operators involved. As was discussed during the DSP Leaders World Forum session, though, it’s very hard to know exactly how the market will play out and there are business gains to be had from associated network services and other enterprise services too, so the actual value is tricky to determine. 

What it should do, however, is give the telcos a better chance to get engaged with enterprise users and better understand their digital services needs. Having been initially slow to get to grips with the digital services opportunities, the “meshing of 5G networks and API exposure” can empower telcos to “reinsert themselves as a key connectivity platform within the digital landscape by unlocking the ability to more easily sell and scale customised, programmable connectivity underpinned by app developer platforms grounded in telecom network APIs,” noted IDC. 

The analyst firm added that a number of commercial APIs focused on geolocation, fraud detection and device information have already been launched and that it expects telcos to accelerate their efforts to develop further network APIs and engage with application developers. 

Patrick Filkins, research manager for IoT and telecom network infrastructure at IDC noted: “While the telecom industry has a mixed history of API monetisation, its latest focus on novel network APIs is being championed by all leading telecom service providers to include global support from key API aggregators, such as the hyperscale cloud providers and leading CPaaS entities.”

But like many industry observers, he cautioned that close collaboration with other parties will be necessary for the telcos if they are to maximise the uptake and use of their network APIs. “The long-term success of these efforts is expected to largely fall to the broader ecosystem consisting of API aggregators and systems integrators that can generate the value propositions required for market education and adoption to take place,” said Filkins. 

- Ray Le Maistre, Editorial Director, TelecomTV