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TELCO APIs AND THE 5G MONETIZATION CHALLENGE

One of the hot topics to 2023 is 5G monetization, driven by the increasing levels of anxiety and cognitive dissonance that seems to have enveloped the mobile operator community as they allocate billions towards network rollouts. With 5G consumer mobility services not moving the needle, there finally seems to be recognition that the operators will not survive with connectivity bundles and subscriptions as the primary source of revenues. We had written about this in a post after Mobile World Congress 2023 in Barcelona in February titled Mobile World Congress 2023 Part 1: The Telco “burning platform”…see link here.


Telcos have long flirted with the idea that their network has capabilities that will be needed by developers. In that sense, the theme was played out in various ways, the latest of these being the “Telco as TechCo.” “Operators need to monetize their network features, and this only happens with APIs. The GSMA Open Gateway Initiative is the latest high-profile attempt to corral the operator community into agreeing to converge on standardized APIs that can be offered to developers. Despite previous failed attempts, this time the Open Gateway effort is building on the recent CAMARA efforts at creating APIs. While it feels like old wine in a new bottle, converting their networks into something more consumable is increasingly becoming a strategic imperative for the operator community.” A more recent article on this was published in the aftermath of the recent Digital Transformation World 2023 event help in Copenhagen by the TMForum, highlighting key takeaways from the event. Link


This past week saw a couple of announcements in this regard that suggest progress in this regard. The first was an Ericsson announcement about the first commercial agreement that it has signed for the network platform that is being built on top of the Vonage acquisition. Ericsson has signed up with Deutsche Telekom in Germany and its platform will power DT’s new offering called “MagentaBusiness API” which will offer Vonage’s existing communication APIs as well as new APIs. LinkLink


Ericsson is not the only vendor to tout the value of network APIs as a monetization driver for operators. It’s key rival, Nokia, has also been talking about the “Network as Code”. While the title projects a vision of network flexibility and programmability, it shares a lot of the same underlying tactical thinking for the larger goal of creating new revenue streams for operators. Developed in house, Nokia’s platform has also been signed up by DISH Wireless in the US with the stated objective of building an ecosystem for enterprise applications. Both the Ericsson and Nokia product offerings are based on CAMARA and the GSMA Open Initiative. Link


These deals are certainly encouraging and indicative of a broader consensus that is building amongst the global operator community. However, the segment is still at a very nascent stage. There is significant work still to be done on standardizing network APIs that are consumable but also in demand. The second point is critical to telco hopes of being able to monetize their network investments. Most initial discussions about telco APIs seem to focus on exposing advanced features like location and positioning through the telco network or enabling network slicing. However, the jury is still out on how much demand there will really be for these features, and more importantly, how much developers would be willing to pay. Regardless, this is a segment worth tracking and we expect to see further momentum through 2024 and 2025.

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