Telco APIs Have Limited Revenue but Key Opportunities Ahead

Telco application programming interfaces (APIs) are increasingly gaining attention, driven by initiatives like the CAMARA project and the GSMA's Open Gateway. Despite the buzz and optimistic forecasts from many trade associations, ABI Research (News - Alert) is predicting that there will be only modest value generation ($13.4 billion) by these APIs - that is also dependent on strategic planning by telcos.

According to ABI Research’s latest report, “Telco APIs: Market Sizing and Key Findings Application Analysis,” APIs related to network slicing, Quality of Service (QoS) on Demand, and security will be the most successful as they offer unique functionalities that developers cannot easily find elsewhere. It also predicts that security APIs will lead in revenue, expected to generate $5.3 billion by 2028. Network slicing APIs follow closely with a projected revenue of $5 billion, and QoS on Demand APIs are expected to bring in $3.14 billion by the same year.

"Despite several recent optimistic telco API forecasts by trade associations claiming these APIs will generate hundreds of billions in the next five years, it is unlikely that telcos will be able to convert these initiatives to a commercial success. They will need to change their mindset, culture, and commercial model radically," said Dimitris Mavrakis, Senior Research Director at ABI Research.

Mavrakis also notes it is necessary for telcos to standardize API exposure across their networks to achieve the projected targets. He points out that while initiatives like CAMARA and Open Gateway (News - Alert) are promising steps, significant work remains in areas such as charging, billing, and network orchestration to support these APIs effectively.

"The involvement of Communication Platform as a Service (CPaaS) providers and hyperscalers in telco APIs, which already have succeeded in creating developer communities, can take a significant burden away from telcos and help them commercialize their API initiatives,” said Mavrakis.