Monetizing 5G further requires telcos to unlock novel applications that enterprises and consumers cannot get from legacy networks. For that, they need third-party developers, for both consumer and enterprise applications. However, developers must have seamless access to various network infrastructures to create these applications. This is why network Application Programming Interfaces (APIs) play an essential role for telcos.
This technology enables developers to easily tweak their applications to utilize network resources and add new functionalities at scale. In turn, enterprise application developers can quickly bring new products/services to market and increase profitability. There has been considerable interest in using APIs for cellular networks recently, with 2024 being an inflection point.
Telcos aim to rectify their initial failures in API development that took place nearly 15 years ago. However, the network API market is drastically different today, and new players are on the scene, but success may not look like what telcos originally envisioned. The US$13.4 billion opportunity very well may require collaboration and reconciliation with harsh truths about who has actual control over the APIs.
Uncertainties with Network APIs
Although there has been some recent momentum for network APIs, it is still a fledgling market. The GSMA Open Gateway API project was formed only a year ago at Mobile World Congress (MWC) 2023. The Linux Foundation-led CAMARA project, the most influential telco API initiative, to date, was only created in 2021.
Neither of these projects has yielded significant results. Indeed, most of the early deployments of have been in trials and pilot projects. Until substantial value is conveyed to developers, such as supporting a killer app, telcos will struggle to stimulate demand for their APIs.
A key obstacle standing in the way of telcos is the fact that their APIs will likely be leveraged through partners. For example, CAMARA APIs are already supported by cloud hyperscalers like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure. App developers are familiar with these cloud platforms and will likely prefer to use APIs there. Therefore, APIs developed by telco operators will primarily be one component of a larger marketplace offered by another organization.
Adding to the uncertainty, telcos must square off against third-party service providers. Two common examples include location APIs competing against device manufacturers and identity APIs competing against Google, Facebook, and others. Again, this limits the potential market capture that telcos can seize in the API market. In other words, telcos will have to share the API opportunity with other company types.
Despite these challenges, ABI Research believes network APIs hold immense revenue opportunities for telecoms industry players. To meet these expectations, an emphasis must be placed on high-value APIs, notably Quality of Service (QoS) on Demand, network slicing, and security APIs.
Extracting More Value from Network APIs
Telco operators are developing various high-value APIs, all of which are in the early stages of rollout. While legacy APIs, such as Subscriber Identity Module (SIM) and swap & location, are still more popular in 2024, the future of network APIs will be more sophisticated and of higher value.
To date, security APIs have been a key focus for telcos, as evidenced by pioneering projects like T-Mobile DevEdge and Orange Developer. Other high-value APIs for telco networks (i.e., QoS on Demand and network slicing) are in an earlier development stage and will see greater opportunities in the latter half of the decade.
ABI Research forecasts that network API service revenue from these APIs will surge from around US$1.3 billion in 2024 to nearly US$13.4 billion by 2028. Network slicing and security APIs will hold the lion’s share of the market, with QoS on Demand use cases being more nascent.
- Quality of Service (QoS) on Demand APIs: This interface is designed to provide developers with more predictable network conditions by allowing them to request stable latency or throughput without needing deep knowledge of 4G or 5G networks. However, the implementation details by telcos remain unclear. As pointed out in API documentation pages, quality improvements cannot be guaranteed at the cell edge. Despite potential limitations as 5G networks become congested, the QoS on Demand API is expected to generate US$3.1 billion by 2028. This is the lowest 5G monetization opportunity of the three APIs our team analyzed.
- Network Slicing APIs: Spearheaded by early beta versions within the CAMARA project, the network slicing API is marketed as a more formidable QoS on Demand API. Due to its high throughput and low latency, this API potentially unlocks new applications for developers. However, network slicing APIs are more intricate than other telco APIs and have more network requirements (e.g., Standalone (SA) packet core, cross-network coordination, etc.). Network slicing APIs will generate the second highest revenue in our API market forecasts, projected to be a US$5 billion opportunity by 2028.
- Security APIs: As the most prominent 5G monetization opportunity of the APIs we evaluated, security APIs help enterprises authenticate employee access and secure services provided to businesses and consumers. By 2028, network security APIs will have an estimated US$5.3 billion market valuation. Solutions like IEMI fraud detection, Know Your Customers (KYC), number verification, geofencing, and location APIs will heavily target enterprises. This trend diverges from the historically consumer-focused security API initiatives of the past.
Other network APIs are in the development process, such as communication APIs (e.g., voice and Short Messaging Service (SMS)), subscriber identity (e.g., device status and SIM swap), location, Multi-access Edge Computing (MEC) (e.g., edge discovery), and carrier billing APIs. However, these APIs are expected to experience strong competition with well-established solutions already available by other companies. Consequently, QoS on Demand, network slicing, and security APIs form the bulk of monetization opportunities for telcos.
How the Network API Market Has Changed Since 2009
APIs in the cellular network context have been a concept since 2009 when Mobile Network Operators (MNOs) hoped to compete with Apple App Store and Google Play Store. Operators failed to allure enough developers to make it worthwhile to continue their API development. Telefónica’s Bluevía and Vodafone’s Betavine are notable members of the graveyard for early network APIs, joined by many more.
Telcos placed their API projects on the back burner for 14 years until they formed the GSMA Open Gateway initiative at MWC 2023. This time, telcos have teamed up together to develop APIs, as collaboration can streamline innovation. The CAMARA project has been even more successful in driving the adoption of telcos’ APIs, having been the predominant use case in early deployments.
Substantial changes have been made since telcos last took a crack at API development in 2009. For one thing, consumers are no longer the main focus when developing network APIs. In the past, telcos aimed to develop and monetize app stores as consumers rapidly adopted smartphones and engaged with associated services, media, and entertainment. This opportunity slipped through telcos’ hands, and given Apple and Google’s dominance, spending time and resources on app store development is futile. Therefore, the focus has shifted to the enterprise domain.
Unfortunately for telcos, the fragmented nature of enterprise network requirements makes it difficult to cater to them. If an API cannot accommodate enough enterprise applications, traffic volume—and, therefore, revenue—will be low. As a result, API initiatives could be put on hold or scrapped altogether because the Return on Investment (ROI) is not worth it. This is why collaboration among telcos is so critical. It fosters innovation and development for network APIs at less financial risk to the individual operator.
Recent Activities
As previously alluded to, there are several other company types that telcos must compete against in the network API market. Key stakeholders include Communications Platform-as-a-Service (CPaaS) providers, cloud hyperscalers, marketplace developers, system integrators, and more. These companies already have a large user base of developers and are actively integrating CAMARA-based APIs to improve their value proposition. Moreover, CPaaS providers already have extensive experience in API development. They offer commoditized service APIs like voice and Short Messaging Services (SMS), making the jump to telco APIs a logical choice.
Infobip is a notable CPaaS company targeting telco APIs, having strong ties with operators and the developer community. For example, Infobip provides CAMARA-compliant APIs for the Brazilian MNOs Claro, TIM, and Vivo. The APIs are used for number verification, SIM swap, and device location, enabling access to all mobile subscribers in Brazil.
Ericsson-owned Vonage is another influential CPaaS player in the telco space. The company’s APIs target voice, video meetings, messaging, email, authentication, and Artificial Intelligence (AI) applications. While its API solutions are currently commoditized, its broad developer ecosystem and industry footprint make it a potential contender in the advanced network API market.
Azure and AWS spearhead hyperscalers’ efforts to introduce APIs to the telco space. Microsoft's Azure Programmable Connectivity (APC) initiative assembles APIs across networks from multiple carriers. This solution provides a centralized API hub, helping address the ongoing challenge of accommodating fragmented global networks. Meanwhile, AWS—like other cloud service providers—has shown early support for network APIs. The company has partnered with several telcos to give AWS developers access to telco APIs, enabling the development of existing applications like Extended Reality (XR) and autonomous vehicles/drones.
Operations Support System (OSS)/Business Support System (BSS) companies like Oracle and Netcracker also show promise for network API development. These companies have extensive ties with the telecommunications industry and are actively involved in telco API initiatives.
Nokia’s Network as Code (NAC) platform is one of the most innovative network APIs developed by a telco operator. Developers can access CAMARA and Open Gateway APIs, ensuring broad support across global networks. Nokia’s API makes life much easier for application developers. It is designed to expose developer-friendly interfaces, removing the need to dig deep into a network. Key to the simplification of Nokia’s API is its ability to interface with The 3rd Generation Partnership Project’s (3GPP) Network Exposure Function (NEF) network element. Some key features in the pipeline for NAC include traffic policy, traffic prediction, roaming, network status, network slicing, and federated capabilities. Nokia aims to offer developers access to multiple mobile networks through an API portal. The Finnish telco has worked with CPaaS companies like Infobip, as well as 13 Communication Service Providers (CSPs) worldwide.
Closing Remarks
The jury is still out on whether network APIs will succeed in the telecommunications industry. Even market-leading telco operator API projects like T-Mobile DevEdge offer limited capabilities. Numerous companies are vying for the attention of enterprises, creating fierce competition and, in some cases, alliances to limit financial risk.
ABI Research takes the position that telcos themselves will not possess the level of control over network APIs they originally aimed for back in 2009. Today, the market favors CPaaS companies and cloud hyperscalers. These organizations will likely have closer ties with the developer community than telcos, with the latter being solely API providers.
Telecom industry voices widely agree that network APIs will be essential in unlocking further 5G monetization. While it is still a very immature market, stakeholders should already be focusing on advanced APIs, with QoS on Demand and network slicing being big moneymakers.
Take a deep dive into the monetization potential of network APIs and identify potential partners and operator strategies by downloading the following research reports:
- Telco APIs: Market Dynamics, Commercial Activities, and Business Models
- Telco APIs: Market Sizing and Key Findings
About the Author
Dimitris Mavrakis, Senior Research Director
Dimitris Mavrakis, Senior Research Director, manages ABI Research’s telco network and cloud computing coverage, including hybrid cloud platforms, digital transformation, and mobile network infrastructure. Research topics include AI and machine learning in telco networks, hybrid cloud deployments and technologies, telco software and applications, 5G, 6G, cloud-native networks, and both telco and cloud ecosystems.
Prior to joining ABI Research, Dimitris was a Principal Analyst with Ovum, covering telco network infrastructure and leading research in SDN and NFV. At Ovum, Dimitris was involved in thought leadership regarding the future of networks and led more than 50 projects on behalf of Tier One operators and vendors.
Dimitris holds a PhD in Mobile Communications and an MSc in Satellite Communications, both from the University of Surrey.
