“The opportunities for growth in the technology and telecom sector are full of promise but success will not be easily won. The winners will be those who take bold steps now to ensure resilience in an unpredictable market1.” – McKinsey and Co.

Telcos are facing mounting pressure. In the face of declining revenues and increasing investment in infrastructure, telco organisations must pivot in order to survive and thrive. The key to success will be unlocking new services and revenue streams. But how might they go about this? One of the most promising and realistic options lies in capturing a larger share of the value generated by Over-the-Top (OTT) services. However, the use of Network APIs, often touted as the enabler, haven’t yet seen widespread success.

Yannick Mayaud, Senior Consultant at STL Partners explains, “Historically, telcos have struggled to capture any significant value from OTT services. Most of the service value goes to other partners and the bit that telcos provide, i.e. the connectivity, even though essential, is priced as a commodity that is subjected to low margins and severe price erosion.” Mayaud adds, “For telcos, the challenge is to claim back a higher share in the value of the end use case and network APIs today could be a route towards achieving this if drawbacks of past pricing models are not repeated.”

Sandeep Singh, SVP, GM, Digital Business Enablement at Mavenir adds, “The absence of globally accessible standardised APIs makes it a challenge for application developers to consume telco network capabilities in a standardised reusable manner. Another issue is the absence of secured yet simplified exposed APIs that seamlessly integrate across all telco network functions delivered by various NEPs (Network Equipment Providers/Vendor) to provide a high-level telco service to subscribers. This critical function requires network operators to abstract the network solution for the non-telco developers and hide all the network integration complexities in a scalable manner.”

The Business Case

Standardised network APIs offer a simplified way for OTTs to access valuable telco network resources like user authentication, location data, and even edge computing capabilities. For OTTs, APIs empower them to develop more innovative and user-friendly services across consumer and enterprise sectors by leveraging telco network capabilities. This, in turn, strengthens their market position and attracts a wider user base.

For telcos, deeper integration with OTT services through network APIs unlocks new revenue opportunities. These could come in the form of API access fees, revenue sharing through innovative service partnerships, or even the creation of entirely new service offerings.

Mayaud explains, “When we refer to network APIs at STL Partners, we mean specifically those APIs that leverage the telecoms network, whereby third parties gain useful information about, or gain some control over, specific network assets. Such APIs generate new value for the telcos, the 3rd party players (OTTs, developers), and the end user. They enable the frictionless flow of valuable data that an operator owns but cannot fully monetise on its own, that’s where the developers can help.

“These APIs unlock new use cases, such as network-aware applications that can respond to real-time network conditions and define or request levels of network services consumed.

They can also provide tools to better address existing use cases. As an example, SIM swap or number verify APIs enable silent authentication for anti-fraud service, as an improvement over what A2P SMS used for two-factor authentication currently provides. The improvement comes from the fact that these APIs are embedded deeper into the telco networks and can trigger a more powerful and efficient solution. So, the telco provides a greater proportion of the use case’s value and as such should be rewarded better than when providing, in this example, A2P SMS.”

Key challenges and considerations

While network APIs certainly hold promise, concerns remain around this approach. For example, the rollout of OneAPI by the GSMA in 2010, a cross-network API initiative did not progress far2. Additionally, a number of similar, unsuccessful schemes have taken place in subsequent years, highlighting the challenges associated with achieving widespread adoption.

Singh sheds light on the situation, “In the past, API standardisation did not focus on building the ecosystem and the ease of use of the APIs by the non-telco community. The APIs were complex, not easy to understand, and the lack of software development kits (SDKs) made it challenging for application service providers (ASPs) or developers to consume. This is where Level 1/Level 2 aggregators came in to bridge the gap, which further impacted revenues.” He elaborates on some of the key learnings, advising to, “Keep it simple and easy to adopt by hiding the complexities and offering SDKs.” He also suggests, “Develop an ecosystem to design, develop, and validate the applications in a secure yet extensible way.”

Reflecting on this, Markus Kümmerle, Tribe Lead MACE Engineering & Production Interface, at Deutsche Telekom confirms, “Making APIs easy and intent-based, instead of technical, complex, requiring deep telco knowledge to manage. For this CAMARA Project has been initiated in 2022, and has grown since then to more than 1100 people from nearly 400 companies globally. There are already more than 100 CAMARA API implementations in telco networks in America, Europe and Asia. The API ecosystem is developed by GSMA Open Gateway, including alignments with other standardization bodies like TM Forum and ETSI MEC. And this time we have the CEOs behind (Open Gateway MoU signatures).”

A changing OTT landscape

According to the experts, introducing APIs into the OTT landscape could be a game-changer for the industry. Mayaud suggests, “We see network APIs as helping to coordinate and connect various initiatives in emerging technologies for the telecoms industry, unlocking the value of these all together. APIs should really not be seen as isolated products and accessing the full value of our recent US$34 billion by 2030 market forecast3 relies on this connected approach.”

Meanwhile, Kümmerle cautions, “Network APIs are still on the doorstep from innovation to production. They need to be tried and tested for each use case and purpose. Not every trial will be successful, so drawbacks will happen naturally. But we’re currently seeing strong customer demand, so if we use the right APIs for the right use cases, there’s a big chance they will be successful.”

Fostering success through collaboration

But how exactly will we see the industry driving this change? Collaboration with a variety of industry bodies will play a key role in achieving this goal. Singh explains, “Industry bodies like GSMA play a significant role in facilitating collaboration between CSPs and OTT players, primarily through advocacy, standardisation, and providing a platform for dialogue. They define the roles and responsibilities of each stakeholder in the ecosystem and the terms of engagement. They also define the architecture, business models, and, where necessary, reference implementations, making it easier to integrate and validate network-aware applications.”

Looking ahead

The future of Network APIs is bright. They hold the promise of a more prosperous future for both telcos, developers and OTTs. By fostering a collaborative ecosystem and learning from past mistakes, the industry can unlock a new era of innovation and value creation.

Deutsche Telekom, Mavenir and STL Partners will all be speaking at Network X, where the use of network APIs to reach new heights and unlock new revenues will be explored in detail. For example, Peter Arbitter, Senior Vice President of Magenta Business API (MACE) at Deutsche Telekom, will present an Operator Keynote on, ‘How to ensure telco APIs will truly drive new revenues’. Meanwhile, Markus Kümmerle will present the Network API opening keynote ‘Knowing your customer: leveraging network APIs to offer personalised and tailored services’.

Meanwhile, a panel discussion entitled, ‘Network APIs to unlock monetisation across fixed and mobile networks’ will be joined Peter Arbitter, Senior Vice President of Magenta Business API (MACE) at Deutsche Telekom, and Gabriela Styf Sjöman, Managing Director Research and Networks Strategy at BT Group and Orange Group. These sessions will discuss everything from how to create a business case to deploy, scale and continually invest in API capabilities, to managing a culture of innovation and managed risk to drive API adoption.

Network X 2024 will be held at the Paris Expo Porte de Versailles on the 8 - 10 October.