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NEW YORK, July 18, 2024 /PRNewswire/ -- Telco Application Programming Interfaces (APIs) have been at the forefront of many recent announcements and market developments, led by the CAMARA project and GSMA's Open Gateway initiative. Despite several optimistic projections by trade associations, the value generated by these APIs will likely be limited to US$13.4 billion and only if telcos plan accordingly, according to ABI Research, a global tech intelligence firm. Telcos are no strangers to API initiatives and projects, and their past includes a plethora of failed attempts. ABI Research expects network slicing, Quality of Service on Demand, and security APIs to be the most successful options, given that they provide unique functionality not offered by other companies to developers.
"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," says Dimitris Mavrakis, Senior Research Director at ABI Research. "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."
According to recent telco API forecasts published by ABI Research, security APIs will lead in revenue with US$5.3 billion by 2028, followed by network slicing with US$5 billion and Quality of Service on Demand with US$3.14 billion by the same year. Mavrakis explains, "Even these targets will require significant effort by telcos to at least homogenize API exposure across their networks and offer a consistent interface to CPaaS providers and hyperscalers. CAMARA and Open Gateway APIs are a step in the right direction. Still, there is significant work to be done, especially in the technology enabling these APIs, such as charging, billing, and network orchestration."
Telco APIs should be considered as a shortcut to commercializing complex services, including network slicing and Quality of Service on Demand, especially when offered by CPaaS providers or hyperscalers who can federate across multiple telcos and offer developers access to a critical mass of subscribers. "Telcos should prioritize API initiatives and even consider them as a training medium for the advanced services being planned for 6G," Mavrakis concludes.
These findings are from ABI Research's Telco APIs: Market Sizing and Key Findings Application Analysis report. This report is part of the company's 5G & 6G Cloud-Native Systems research service, which includes research, data, and ABI Insights. Based on extensive primary interviews, Application Analysis reports present an in-depth analysis of key market trends and factors for a specific application, which could focus on an individual market or geography.
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