Network APIs mission builds steam as GSMA eyes $300B in sales

Talk of application programming interfaces (APIs) might trigger a yawn from bleary-eyed investors who have watched revenue-growth initiatives in telecom crash and burn for years. Over a coffee at a recent Ericsson event in London, one investment banker told Light Reading that sentiment toward the industry has never been so low. But momentum around network APIs is clearly building, and the GSM Association (GSMA), the organizer of next week's Mobile World Congress in Barcelona, has rustled up research that values the revenue opportunity at around $300 billion between now and 2030.

In an industry that generates about $1 trillion in service revenues annually (according to Omdia, a Light Reading sister company), it's a number that demands some attention. Produced by McKinsey, the original poster child of management consulting, it would equate to a few percentage points in sales growth if it trickled down into telco pockets. That's more than many operators have seen for a long time.

The big idea, for the uninitiated, is to standardize the "northbound" APIs between the network and the applications that use it. Why does that matter? Because it theoretically means a developer can produce one set of code for the world's networks instead of writing software on a telco-by-telco basis. Operators and platform builders like Ericsson (with its Vonage unit) are optimistic about the inherent value of the network features these APIs would expose. And they expect developers to pay for access.

Different strokes

Skepticism won't disappear overnight (we'll return later to the topic of revenues and where they may come from), but naysayers can't deny there has been enthusiastic support across the entire industry for Open Gateway, the GSMA initiative on common APIs first announced at last year's MWC. When Light Reading caught up with the GSMA just before the 2024 show, the number of signatories to the Open Gateway memorandum of understanding had grown from 19 to 47 in a year. That figure, according to Henry Calvert, the GSMA's head of networks, represents some 239 operations globally and roughly two thirds of all mobile connections.

More importantly, in countries including Brazil, Indonesia, Spain and Sri Lanka, operators have been coordinating their storefront launches. Ericsson's Vonage underpins the rollout in Spain and will also be the aggregator or intermediary for telcos in Germany. In Sri Lanka, AWS provides a multi-operator platform. These are encouraging developments after several operators, including Deutsche Telekom, previously set up their own API storefronts ("powered" by Vonage, in the case of the German incumbent).

The implication was that developers who wanted access to those APIs would have to transact multiple times with the telco community to cover all networks. To Howard Watson, the chief security and networks officer of BT, it seemed to contradict the original idea of a single "clearinghouse" for the whole industry. "I think this is the right vision because the complexity of a developer having to pay every single operator will be a big deterrent to consumption and adoption," he said at a recent press briefing.

Several approaches now seem to be taking shape, according to Calvert, who said the GSMA previously saw failure when it was overly prescriptive. "We've got three basic commercial models," he explained. Besides the idea of a central clearinghouse, there is the aggregator model – with companies such as Infobip in Brazil playing intermediary between multiple telcos and the developer community – and the single-operator storefront à la Deutsche Telekom.

All this naturally raises concern. "What I really want to understand is where is the money going – into which part of this – because the last thing you want is the aggregation piece taking too much of a percentage of the overall value chain," said Watson. It also means a landgrab has started, a scrap over national markets between platform builders like AWS, Ericsson, Infobip, Microsoft Azure, Nokia and Sinch.

Hence some recent fighting talk by Ericsson as it tries to lure developers and partner with telcos. "We are at 1.6 million developers now, growing from about 1.4 million a year ago," said Erik Ekudden, Ericsson's chief technology officer, at its recent London event. "If you go to any generic platform on the web, you may not get that knowledge about how to connect networks. They are great at what they are doing, but, frankly, I think we know a little bit more about the networks."

Telco executives like Watson, concerned about the power of aggregators, may have an interest in seeing more than one multi-operator platform per country. Yet developers will find too many of them off-putting. "Not all will build these apps we talk about, but the ones that do that will have a developer experience on that platform and maybe use AWS and Microsoft platforms as well," said Ekudden. "But you don't have to go to 400 different ones."

Candid CAMARA

From the GSMA perspective, what's critical is ensuring standardized technical interoperability not just between networks and apps, but also across the different platforms where those exchanges happen. The Linux Foundation's CAMARA Project, which provides the recipe book for these standards, is also providing support, according to Calvert. "We've actually used the same CAMARA northbound interface to go east-west," he said. "It's just slightly heavier with the fulfilment that's required."

In total, CAMARA is now addressing some 40 or 45 APIs, 26 of which have been identified as priorities by telcos. And 35 operators as of last week had commercially launched APIs (Calvert says there are 79 "instances" of the 26 prioritized APIs). Coordinated launches by operators in individual markets have clearly been encouraged by the GSMA.

"We took an action in June last year to say it makes sense if we get operators to align the APIs they are going to launch," said Calvert. "If everyone launches SIM swap, device verification and number verification, then that is going to be a big and useful tool for developers, especially in the fintech industry for combating fraud."

As for that $300 billion revenue figure, the GSMA expects money to flow from several directions. The first involves developers paying a per-transaction amount for the API. Then there is the possible uplift in average revenue per user from what Calvert refers to as "enhanced connectivity." A Fortnite gamer, for example, might pay an additional charge for a short-term quality-of-service guarantee, delivered over a dedicated network slice, to avoid the risk of online death by lag.

"The third category is indirect," said Calvert, giving the example of an edge site discovery API. "That might be given away for free, because it's just information, but what you actually get is the telecom person storing compute, because someone is using your edge resources."

Of course, attracting developers will be the key to the success of all this. "The telecommunications industry is not great at talking to developers," said Calvert. "But hopefully by talking to them in software code, in the language they understand, we start to get the message through."

On Tuesday, visitors to this week's MWC will be able to watch an Open Gateway APIs hackathon involving 40 to 50 developers, among other software activities. Calvert, meanwhile, is now playing API missionary as he tries to spread the message to software-as-a-service companies including Salesforce.com. Like a Fortnite avatar on a low-latency link, telecom's latest big initiative is still alive and kicking.