Telecommunication operators are sitting on a trillion-dollar edge market opportunity that is set to be unlocked by partners using API connectivity between telecom network resources and growing end-user demand for applications like generative artificial intelligence (genAI), private 5G, and real-time analytics, though the timing of that financial windfall remains in question.

Research firm Canalys noted in a recent report that the total addressable market for telecommunications will hit $1.42 trillion this year, with a vast majority of that spending coming from channel partners. This is “providing an immense opportunity for partners to capitalize on telco edge services.”

That opportunity is sitting behind network API initiatives, with Canalys specifically pointing to a recent deal struck between Ericsson, Google Cloud, and a dozen of the world’s largest telecom operators, including AT&T, T-Mobile US, Verizon, and Vodafone. The for-profit venture will work with Ericsson’s Vonage division and Google Cloud, which will provide access to the hyperscaler’s developer ecosystem.

“Network APIs are not just a tool, they are a gateway to the next wave of digital transformation, and partners who embrace this shift will lead the charge in the edge revolution,” Canalys noted in its report.

When will network API revenues rise?

Timing of that API-fueled edge revolution remains in question.

Operators have increased their focus around these edge opportunities, pointing to their embedded telecom edge infrastructure that is primed to support AI-type use cases.

“These kinds of AI workloads will increasingly demand that processing have happen on the device, which we’re starting to see but there are obvious limitations there, or on a cloud near the device, and that’s a business opportunity that we see in the future,” T-Mobile US CEO Mike Sievert said during a recent investor conference.

Verizon CEO Hans Vestberg during a recent investor conference noted that while the market itself around AI and genAI continues to gain momentum, it could still be some time before market dynamics shine on true edge infrastructure.

“The loads are coming,” Vestberg said during the Goldman Sachs Communacopia + Technology Conference. “Probably it’s going to take some time because the majority of genAI today is large language models that you’re training, so they send them way back to the data centers. But as soon as they start doing, like Verizon, it’s an application that you use, then you want it closer to the customer because of transport costs, security, [and] in certain cases, latency.”

Ericsson CEO Börje Elkolm during the vendor’s latest earnings call touted estimates that the API market could be worth up to $30 billion, though he did moderate expectations.

“I think it's still too early to properly size the opportunity, but it's encouraging to see the growing momentum and the growing interest,” Elkolm said. “And we're starting to see in some frontrunner markets an emerging interest for the network API. This is a market that's shaping up and we have the opportunity to shape that.”

That shaping is expected to include new hands from different market segments.

“We're starting to attract developers that will start to use these type of new APIs in a new way,” Elkolm added. “That may not be the same developers we had for communication APIs. There may be others, because they are going to know a certain vertical better.”

Ericsson rival Nokia expects similar opportunities. Nokia is notably not part of the Ericsson-led venture, but has been pushing its own network API strategy.

Nokia CEO Pekka Lundmark during that vendor’s latest earnings call did praise the Ericsson-led efforts as being a necessary accelerant toward the broader telecom API market opportunity but remained vigilant on Nokia’s plans to stay the course.

“We have … taken a slightly different approach than our competitor. We have developed all of this organically,” Lundmark said. “We came to a conclusion that we do not need to acquire a legacy best player to enter this market. We have developed this organically and with pretty good progress. We announced this initiative a year ago, and we are currently having more than 20 partners across the ecosystem, including 16 [communication service providers] … so we are able to offer extremely attractive base of networks to the developers who want to use our APIs. So overall, this is a good thing to the industry.”

Canalys concludes that this diverse approach will also spill into how these API-fueled edge offerings are brought to market, noting that channel partners “will have an opportunity to differentiate, innovate, expand their service portfolios, and drive new revenue streams by becoming key players in the future of connectivity and a link between telco edges and end-users.”