The telecom market has finally started to roll out network API initiatives, moving on what has been a decades-long attempt by operators to monetize their network intelligence and start to shed their “dumb pipe” history. But significant hurdles remain before they can truly shake that moniker.

Telecom API efforts are nothing new. AvidThink Research, in a recent report, pointed back to efforts like the ETSI Parlay initiative from 2008 and the subsequent GSMA OneAPI initiative. While the big-picture aspect of those initiatives failed to gain traction, the kernel of those ideas remained.

That idea was to find a way for telecom operators to consolidate the vast amount of data embedded in their networks into easy-to-consume packages that application developers could access … for a price. While that all sounds simple, the challenge for many operators has been the decades of legacy equipment and processes in those networks that made extracting that data challenging.

However, the digitization of those networks that really started to take hold beginning around 2010 has begun to provide easier avenues in which to mine that data trove. Those efforts gained momentum around the turn of the decade across both wireless and wireline networks, boosted by the cloudification of network resources.

Stephanie Ormston, assistant VP for digital services integration at AT&T, previously explained to SDxCentral that the carrier’s more than decade-long work in virtualizing its network has opened up these opportunities.

“We want our network API strategy, and we want our network to be the programmable application upon which they can build out all of those diverse use cases,” Ormston said.

That programmability was there to an extent with previous 4G LTE networks, but operators failed to take advantage of that possibility, and 4 The money is there, but questions remain whether the telecom market can grab it most of those profits went to the application store community. AT&T doesn’t want to miss that opportunity this time.

“Building out networks is really expensive, and what we realized is there was more that we could have done around 4G, and so we see 5G as the opportunity to take advantage of that,” Ormston said. “Within that, I think there’s the cost efficiencies that can be realized, the optimization that can be realized, but we also do believe that there is going to be a next evolution in the next generation of technology and innovation in the market. We want our network to be not only in support of that, but to be the place that we can co-create and co-develop that type of innovation and share in that value creation.”

Analysts have pointed out that operators had initially failed in these efforts.

“Thus far, the 5G era has been playing out very similarly to the 4G era when [communication service providers] invested hundreds of billions of dollars in spectrum and network infrastructure and realized paltry [return on investment] as the majority of the new value from those investments went to over-the-top players, most notably hyperscalers,” Chris Antlitz, principal analyst at Technology Business Research, wrote in a research note on that topic.

This notion was somewhat highlighted by Chivas Nambiar, GM for AWS’s telco business unit, who, during a press briefing in early 2024, explained that while these API initiatives “are good … they’re not sufficient.”

“You have to have additional components,” Nambiar said. “You have to be able to take a workload or a use case, and that use case needs to run on some sort of compute, it needs access to storage and databases, and machine learning capabilities at the edge. And all of those need to work together in a way that a developer can use it to create the solution, test it, and see what works and what scales.”

Nambiar said that independent software vendors (ISVs) at that time were best positioned as an API intermediary between network operators and end users.

“That is where I suspect longer term most of the revenue is going to come from: ISVs consuming the telco APIs to build differentiated experiences,” Nambiar said. “But it’s very early in the game. This year, you have probably seen from the plethora of announcements happening right now. This is where that discussion is really starting to heat up, and I'm excited about in two years what the marketplace actually looks like.”

Market momentum

Well, two years later, and that market looks like it has some walls, if not a cash register.

This latest telecom API push actually began four years ago when GSMA and The Linux Foundation pooled their resources behind the Camara Project API. Those efforts gained momentum a year later when GSMA launched its Open Gateway initiative, which included support from more than 20 companies and global operator heavyweights AT&T, Bharti Airtel, China Mobile, Deutsche Telekom, Verizon, and Vodafone.

That initiative is targeted at standardizing network APIs that the telecom industry can offer to the developer and application community to simplify revenue-generating interactions.

Open Gateway uses common, northbound service APIs to expose a mobile operator’s network capabilities “within a consistent, interoperable and federated framework.” It launched with a focus on a handful of APIs, including support for SIM swap, quality on demand, device status, number verification, edge site selection and routing, two-factor authentication, and carrier billing.

That effort has slowly gained momentum, with dozens of more operators jumping on board and some of them actually working together on standardizing their API efforts. GSMA’s Open Gateway project has continued to gain support and, more importantly, gained a financial edge based on the Ericsson and Google-developed Aduna telecom API project. That project, which was unveiled in late 2024, is focused on developing and selling network APIs that can power new digital services running on platforms from hyperscalers, communications platform-as-a-service (PaaS) providers, system integrators (SIs), and independent software vendors (ISVs).

An AT&T spokesperson, in an email to SDxCentral at that time, pointed to several reasons as to why the carrier joined the initiative.

“In order for the telecom industry to grow, there needs to be new business models that allow CSPs [communication service providers] to monetize more advanced features of 5G networks through new high-performance applications,” the spokesperson noted. “The new venture will provide CSPs with a large [go-to-market] channel to Vonage and other major platforms like Google with tens of millions of developers.”

The carrier also pointed to the bottom-line focus of the venture, stating the “newly formed company is a commercial organization that has profit and loss responsibility.”

Analysts have pointed to that opportunity.

IDC predicts the worldwide telecom and network API market will generate north of $6 billion in revenues per year by 2028. This includes the market surging at a 57.1% compound annual growth rate (CAGR) from the approximately $700 million in revenues generated in 2023 to more than $6 billion in 2028.

“While the telecom industry has a mixed history of API monetization, its latest focus on novel network APIs is being championed by all leading telecom service providers to include global support from key API aggregators, such as the hyperscale cloud providers and leading [communication platform as-a-service] entities,” Patrick Filkins, research manager for IoT and telecom network infrastructure at IDC, noted in the report.

“Even so, the long-term success of these efforts is expected to largely fall to the broader ecosystem consisting of API aggregators and systems integrators that can generate the value propositions required for market education and adoption to take place.”

What’s the holdup?

But the GSMA-led API work is not the only game in town. Nokia has been running its own Network as Code initiative that has gained operator interest, some of whom are also part of the Aduna project.

Raghav Sahgal, president of Nokia’s Cloud and Network Services (CNS) division, previously explained to SDxCentral that Nokia’s approach is unique in the market because “we are bringing the ecosystem.”

“You’ve got to think about how you bring the network capability and expose it,” Sahgal said. “You've got to understand the radio network. You've got to understand the transport network. You have to understand the core network. You have to understand all of these things because when you're delivering, for example, a quality of service API to an application that has to be across the network, how do you bring that together? It's just not knowing that I have an API, but you have to actually bring the APIs from the radio side, from the IP-optic side to the core side, to the cloud side, and bring it together.”

“How are the hyperscalers going to do that? How are the CPaaS [communication platform-as-a-service providers] going to do that?” Sahgal asked. “How are our competitors, who only have one piece or another, how will they do it? Because of the width of Nokia, we understand the network end-to-end. We've got radio, we've got IP optics and fixed, we've got the whole core portfolio, all the orchestration, we work with cloud that puts us in a very different position, and we are not competing with ecosystems, we're working with them. And that creates the big unique differentiator of how we unclutter and be relevant.”

That differentiation does provide choice, but could also stall adoption by operators hoping for a more unified approach to what’s supposed to be a network API unification effort.

AvidThink’s report noted several “obstacles” that the market still needs to overcome. These include current telecom interfaces that lack the polish developers have become accustomed to, continued debates around the actual monetization models, and maintaining consistency and trust across the ecosystem.

However, the research firm said the “biggest risk of all” is “organizational inertia.”

“The single largest risk for CSPs is losing out on the opportunity by moving too slowly,” the report states. “The sense of urgency and level of executive visibility have never been higher. If operators fail to execute quickly and at scale, non-telco players will inevitably step in to capture the valuable new revenue pools. The successful operator in the coming years will be the one who treats the API market not as a new product line, but as the culmination of an enterprise-wide operational and commercial transformation.”

This article first appeared in the SDxCentral Telecom Supplement.

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