Taking telco APIs to the market

A weak spot in telecom is the ability to connect to the rest of the ecosystem. As the ecosystem becomes richer, more diverse, and more valuable, its complexity and the number and type of players have increased. Telecom networks excel at providing connectivity to their users, whether through Wi-Fi or cellular. We often complain about limitations in coverage and capacity, but overall, networks do a pretty good job. When it comes to access, operators have been successful at linking all the elements through standardization and cooperation. With your phone—any phone—you can get connected pretty much anywhere in the world, often without even paying roaming fees.

But connectivity is more than access. It is about services that we use to get what we need. I need to figure out where I am or where I want to go, let people know I am late, pay for everything, read or watch the latest news, listen to podcasts, and check home security devices. And this is without even considering work activities. This involves many apps and many players, and in most cases, operators have hardly any relationship with them and, more to the point, no direct way to improve their services, even though there are many ways for them to do so. They are leaving money on the table, both in terms of potential revenue from these players and of increasing network efficiency by optimizing network traffic management based on service requirements.

Telecom operators have fallen behind in establishing strong links with all the players involved in the connectivity ecosystem. In many cases, this happened because operators wanted to protect their revenues by retaining control over the user experience, pushing for walled-garden approaches. This strategy has failed from 3G to 5G in pretty much all markets. Operators need to find ways to reach out to the rest of the ecosystem more effectively by providing value to the other players—especially if they expect, as reasonable, to extract some revenues.

This is where telco APIs come in. They can be the glue, the connective tissue that enables operators to reach out in meaningful ways to others—primarily to players that are not in telecoms, such as application developers and enterprises.

In the broader IT ecosystem, APIs have fulfilled this function for some time already. They are a proven tool and offer the telco industry a blueprint to follow, although the path to adoption must adapt to the features and dynamics of the telco environment.

This report discusses what is unique about telco APIs and how operators can benefit from them. How can they offer APIs that are valuable and easy to use for app developers and enterprises? How can they communicate their value proposition and reach their prospective customers? What is that API can and cannot do? What revenues can operators reasonably expect?