According to a report by International Data Corporation (IDC), worldwide revenues for telecom and network application programming interface (APIs) will reach $ 6.7 billion in 2028. This represents a compound annual growth rate (CAGR) of 57.1 per cent over the forecast period of 2023–2028. Worldwide market revenue for APIs was just over $ 700 million in 2023.
The report noted that historically, communications service providers (CSPs) have led at providing mobile connectivity at scale. In past decades, this proved a profitable strategy, with the value of connectivity garnering consistent year-over-year (Y-o-Y) revenue growth and profits. However, third-party entities, including communications-platform-as-a-service (CPaaS), cloud, and other digital platform players, have moved in to siphon off digital opportunities while curating vast developer ecosystems, relegating many CSPs to just a connectivity provider role. Said differently, CSPs have been unable to efficiently monetise both the growth and diversity of devices driving ever more network traffic on their own infrastructure.
The report highlighted that as the value of connectivity has slowly commoditised, the value shift toward digital and platform-based capabilities across all industries has risen. Indeed, platform-based commerce has enabled the rapid growth and expansion of marketplace economics. CSPs have been slow to adapt to the new paradigm.
As per the report, with this backdrop, the meshing of 5G networks and API exposure can empower CSPs to reinsert themselves as a key connectivity platform within the digital landscape by unlocking the ability to more easily sell and scale customised, programmable connectivity underpinned by app developer platforms grounded in telecom network APIs. In addition, commercial APIs are already available for fraud detection, location, and device information as well as quality on demand. Moreover, IDC expects CSPs to accelerate API volume and developer engagement.
Commenting on the report, Patrick Filkins, research manager, internet of things (IoT) and telecom network infrastructure, IDC, said, “While the telecom industry has a mixed history of API monetisation, its latest focus on novel network APIs is being championed by all leading telecommunications service providers (TSPs) to include global support from key API aggregators, such as the hyperscale cloud providers and leading CPaaS entities. 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.”
