Telco APIs Set for Massive Growth, But Only If They Act Now

By Arti Loftus October 05, 2022

Precedence Research recently came out with its growth forecast for Telco APIs, predicting that the global telecom API market size is expected to be worth around $1.2 trillion by 2030, growing at a compound annual growth rate (CAGR) of 21.62% from 2022 to 2030.

According to the firm, the expanding deployment of 5G technologies and networks “is one of the factors driving the global telecom application programming interface (API) market. In April 2020, the Small Cell Forum, for example, launched a 5G functional application programming interface (API) to enable a 5G small cell vendor ecosystem.”

The increasing number of mobile service subscribers is another element driving the worldwide telecom API industry, and Precedence is not alone in recognizing the growth potential  of telco APIs, which are a special breed within the much larger overall API world.

Grand View Research published its latest report on Telco APIs earlier this year, projecting, 20.6% CAGR from 2022 to 2030, moving progressively upward from a 2021 market value of $162.27.

“Telecom APIs are used to operate web-based services such as banking, identity management, and cloud-based telecom software by compiling programming instructions and standard protocols,” wrote Grand View Research. "Telecom APIs provide cost-effective solutions by enhancing the system performance of existing web-based applications. These tools and communication protocols facilitate agility in mobile application developments as it allows developers to focus on the primary functions without a need to develop them from scratch.”

Data published by GSMA last year said that by the end of 2021, 5.2 billion people subscribed to mobile services, which it forecast to reach 5.7 billion people by 2025; the more subscribers and mobile devices and more powerful networks, the more valuable Telco APIs become.

We caught up with Chris Koeneman, CRO at Kandy (News - Alert), one of the pioneers in developing Telco APIs. Kandy’s Communications Service as a Platform, or CPaaS, is the foundation for AT&T’s API Marketplace launched a few years ago.

“Given the unstoppable growth of devices and the fast-paced evolution of high-speed networks, consumers are finding new ways to benefit from voice, video, and messaging without the friction of traditional telephony experiences,” Koeneman said. “The shift from voice networks to IP networks opened up many new possibilities over the last few decades, but the major shift is in how telecom and the web have come together and make possible powerful new digital services platforms.”

Telecommunications companies, in the aggregate, make up the most pervasive and critical infrastructure on the planet, serving billions of customers, and generating more than $1.6 trillion in revenue, also according to Grand View Research.

“The huge revenue opportunity alone makes this market incredibly attractive, especially for the largest telcos who have invested in generations of more powerful wireless networks, including 5G, which provides speeds that are 10X faster and support advanced applications, including communications embedded into applications,” Koeneman said. “The value of telco data cannot be overstated – from presence to preferences, managed with respect for privacy.”

Koeneman explained that the innovation around APIs is limitless.

“We are inspired every day by what developers are doing when they use our APIs to enrich the experience with telco services. Developers, their partners, and their enterprise customers who are investing in brilliant customer experiences utilizing telco features understand they can tap into a massive global market, and we are seeing web companies using telco APIs to build new services which consume data from network operators who expose that data through APIs. Huge new revenue streams are possible in this and other scenarios, including service providers like AT&T (News - Alert) who are bringing their API marketplace to their large enterprise customers.”

Koeneman pointed out that some telcos have ignored the API opportunity but that more and more are coming around.

“To remain relevant and profitable in the context of the mobile application revolution, telcos can make nearly every service they o?er consumable by applications and APIs,” he said. “We’ve seen this movie before, from Skype (News - Alert) to WhatsApp to voice-activated assistants and navigation applications which have felt more like threats than opportunities to traditional telcos. With marketplaces, the most successful telcos are making it easy to discover, procure, and scale the sale of their valuable data, generated by their increasingly fast and intelligent network infrastructure, monetizing their capital investments and perhaps even more importantly – enhancing their brands.”

If telcos want their core services (voice and messaging) or enabling services (advertising, payments, location, etc.) consumed – if they wish to fully participate in the growing “app economy” – they must make services available to applications via APIs.

Marketplaces are mission critical, Koeneman suggested: “Telcos must simplify contracting processes to make it much easier to do business with them by enabling self-support for developers, integrations for billing purposes, and much more. What we’ve learned as a pioneer in real-time communications platforms and API marketplaces is that developers are a different breed and are truly channel partners when the business architecture is set up properly. With solid developer support in place, a vibrant API marketplace, and an ongoing API management program, telcos can become part of the fabric of innovation, inviting developers to participate by enhancing their applications with real-time information and big data, automation, and more.”

Telcos are increasingly getting into the game by adopting the agile techniques of Internet and web companies.

“Like any business, Telcos embarking on an API initiative need to have clarity around their business goals and the unique value proposition of their APIs for developers and end users,” Koeneman said. “This is an incredibly exciting time for those who invest in creating their vision and building not only their APIs but their marketplaces and developer communities.”

Arti Loftus is an experienced Information Technology specialist with a demonstrated history of working in the research, writing, and editing industry with many published articles under her belt.

Edited by Erik Linask
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