Navigating the network API tangle

The use cases are limited and the market value over the short-term is paltry – but the opportunity is in offering high-value APIs at scale.

Robert Clark, Contributing Editor

October 25, 2024

3 Min Read
Ericsson headquarters in Kista, Sweden
Ericsson's JV with major telcos is so far the biggest API initiative around.(Source: Ericsson)

The network API market is getting up a head of steam, if recent activity is anything to go by. But there are more questions than answers at this stage. 

The biggest initiative has been the global JV between Ericsson and some of its biggest customers, among them América Móvil, AT&T, Bharti Airtel and Vodafone, along with Google Cloud. It's a non-exclusive arrangement, and some of the operators have also joined the Nokia platform.

But the 50% Ericsson-owned venture is by its nature limited, excluding China, Korea and Japan, as well as most of the developing world.

The idea is to solve the biggest problem telcos have with network APIs, or any kind of agile new software-based service, which is building a unified global footprint for developers and customers. A start-up with a dozen staff has this problem solved when it rents its first CPU cycles.

That it will take until next year to get the new venture and running underlines the problem. Getting telcos to move in step with each other is infuriatingly slow.

Market size estimates vary somewhat. McKinsey has talked of a total $100-$300 billion opportunity for telcos, with up to $30 billion directly from the APIs themselves. But other forecasts are rather more modest.

Subscriber ID APIs

Omdia, a sister company of Light Reading, has predicted an $8.7 billion market by 2029. ABI Research puts it at $13.4 billion and STL Partners at $20 billion.

Over the next four years Omdia sees a market limited mainly to security services, in particular number verification and SIM swap.

"We expect subscriber identity APIs to make up the bulk of the revenues. SIM swap and Number verification are already in use in some major banks and offer clear value to businesses," said Adam Mackenzie, a senior service provider analyst.

These aren't game changing numbers – but the opportunity seems to be getting to unified scale over the medium-term and offering high value APIs like network slicing and QoS, as ABI argues.

By contrast the expansive McKinsey view is that APIs can unlock huge B2B edge and connectivity-related markets in enterprise segments. It calls on telcos to collaborate with one another and across the value chain to create fully interoperable APIs and generate demand by illustrating their value.

But it also admits operators have probably already ceded "as much as two-thirds of the value creation" to big cloud players and aggregators. So yes, even the most enthusiastic proponent ends up having to acknowledge the large and intractable obstacles.

Against this less than encouraging background, however, ABI Research cites the case of Singapore-based Bridge Alliance's BAEx platform as a different, telco-led approach that might yield results.

As a regional grouping it has experience in helping enterprise clients overcome fragmented markets and cultural and regulatory hurdles.

In a complex and heterogeneous regional market, "a regional-focused platform, as opposed to a standard global one, could be a potential way to address more specific regional pain points," ABI argues.

But once again it gets down to whether these industry aggregation platforms can win over developers against the existing API incumbents.

The industry needs to learn from its past mistakes and avoid fragmentation of the API market and focus instead on fostering "strong collaborations and building a sustainable network API ecosystem," ABI urged.

About the Author

Robert Clark

Contributing Editor, Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. 

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