- The debate over the viability of network APIs rages on
- Telcos need to drastically change their mindset if API initiatives are to be a commercial success, according to ABI
- Security APIs are seen as the most successful telco option
Network application programming interfaces (API) have been much in the news of late, spurred by initiatives such as the GSMA-led Open Gateway that was formed out of the cross‑sector CAMARA project.
According to an update from the GSMA in June, 49 mobile operator groups, representing 241 mobile networks, have now signed up to Open Gateway initiative and 28 Open Gateway APIs had been published on CAMARA by that point, with 107 commercially available instances of the APIs.
Meanwhile, views about the prospects for network and telco APIs vary considerably. One of the more bullish statements came from McKinsey, which in February estimated that the network API market could “unlock around $100 billion to $300 billion in connectivity- and edge-computing-related revenue for operators,” while generating an additional $10 billion to $30 billion from APIs themselves, over the next five to seven years.
Reality bites
ABI Research has now waded into the debate with the apparent intention of injecting a little realism into market forecasts.
Its view is that despite “several optimistic projections by trade associations,” the value generated by telco APIs “will likely be limited to $13.4 billion and only if telcos plan accordingly.”
As observed by Dimitris Mavrakis, senior research director at ABI Research, telcos will need to “change their mindset, culture and commercial model radically” in order to convert API initiatives to a commercial success.
“The involvement of communication platform as a service (CPaaS) providers and hyperscalers in telco APIs, which already have succeeded in creating developer communities, can take a significant burden away from telcos and help them commercialize their API initiatives,” Mavrakis said.
ABI Research said it expects network slicing, quality of service on demand, and security APIs to be the most successful options, “given that they provide unique functionality not offered by other companies to developers.”
According to recent telco API forecasts published by the firm, security APIs will lead in revenue with $5.3 billion by 2028, followed by network slicing with $5 billion and quality of service on demand with $3.14 billion by the same year.
Mavrakis warned, however, that even these targets will require significant effort by telcos to at least “homogenize API exposure” across their networks and offer a consistent interface to CPaaS providers and hyperscalers.
“CAMARA and Open Gateway APIs are a step in the right direction,” he added. “Still, there is significant work to be done, especially in the technology enabling these APIs, such as charging, billing, and network orchestration.”
He concluded that telcos should “prioritize API initiatives and even consider them as a training medium for the advanced services being planned for 6G.”
McKinsey had also noted that 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,” the company said.
McKinsey also suggested that telcos will need to reconsider many of their traditional ways of doing business, with cross-industry collaboration playing a key role.