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Application programming interfaces can provide telcos numerous opportunities and generate billions of dollars

APIs Can Generate Billions for Telcos

Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
Heavy Lifting Analyst Notes
12/12/2012
50%
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"You can get the milk without knowing how to milk the cow" was how Locaid CEO Rip Gerber described the benefit of application programming interface (API)-based access to telecom networks. And you can get a lot of milk out of telecom networks if you know how.

The idea of API enablement might sound "tech-y," but it is important for executives at telecom operators and service providers to understand the potential of a market that could be worth billions of dollars a year. APIs may well be the next killer app that telcos have been looking for – essentially making it easy for their own internal teams and for developers out in the wider world to access their network systems, to easily create new revenue-generating services.

It is an idea a few major telecom operators are now coming to grips with. AT&T Inc. (NYSE: T) is one of the most public leaders in this space, with major projects to open up APIs for new service creation and a program to engage developers. Other major carriers, such as Verizon Communications Inc. (NYSE: VZ) and Telefónica O2, are also active, as are the Canadian mobile operators. In addition, mobile operators in the U.S. have all been forced to provide access to location APIs. Yet there are many telecom operators that have not moved API development much beyond participation in the various cross-industry API standardization schemes (such as the development of OSA/Parlay and OneAPI). And there are many more that have not even been involved in those programs.

There are many technological, financial and cultural reasons for the slow rate of movement. But operators that do not embrace the idea of exposing APIs will be slower to market than their rivals, miss great collaboration opportunities with the Internet developer community and fail to open up some great revenue-generating opportunities.

Fixed and mobile operators have the opportunity to exploit API access into their systems, and they don't have to do it all themselves. A range of vendors have moved into the market to support them, including heavyweights, such as Alcatel-Lucent (NYSE: ALU), Cisco Systems Inc. (Nasdaq: CSCO), Ericsson AB (Nasdaq: ERIC), IBM Corp. (NYSE: IBM) and Oracle Corp. (Nasdaq: ORCL), that offer various ways for operators to expose their own APIs; specialist API service providers, such as Locaid, LocationSmart (Technocom Wireless), Twilio Inc. and Placecast, that are offering developers API access to services across multiple providers' networks; and independent API creation and management platform providers, including Aepona Ltd. , Apigee Corp. , Layer 7 Technologies Inc. and Voxeo Labs , whose systems are designed to support carriers in widespread exposure of APIs.

The new Heavy Reading Service Provider IT Insider, "Opening the Door to Web Developers: How APIs Can Generate Billions for Operators," takes a detailed look at how operators can use APIs to grow their businesses; shows the many use cases that are emerging, and the range of business models being used; provides a detailed case study of AT&T; and profiles the leading technology providers identified above, analyzing the solutions they offer to telecom operators.

— Simon Sherrington, Analyst, Heavy Reading Service Provider IT Insider

Opening the Door to Web Developers: How APIs Can Generate Billions for Operators, a 41-page report in PDF format, is available as part of an annual subscription (6 bimonthly issues) to Heavy Reading Service Provider IT Insider, priced at $1,595. Individual reports are available for $900.

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