It’s Only Common Sense: Create Passion That Customers Feel
Punching Out: How to Stay Focused in Business and M&A
Marcy’s Musings: Old School vs. New School—When Does It Matter?
Worldwide revenues for telecom and network APIs will reach $6.7 billion in 2028, according to a new forecast from International Data Corporation (IDC). This represents a compound annual growth rate (CAGR) of 57.1% over the 2023–2028 forecast period. Worldwide market revenue for APIs was just over $700 million in 2023.
Historically, communications service providers (SPs) 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 revenue growth and profits. However, third-party entities, including CPaaS, cloud, and other digital platform players, have moved in to siphon off digital opportunities while curating vast developer ecosystems, relegating many comms SPs to just a connectivity provider role. Said differently, comms SPs have been unable to efficiently monetize both the growth and diversity of devices driving ever more network traffic on their own infrastructure.
As the value of connectivity has slowly commoditized, 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. Comms SPs have been slow to adapt to the new paradigm.
With this backdrop, the meshing of 5G networks and API exposure can empower comms SPs to reinsert themselves as a key connectivity platform within the digital landscape by unlocking the ability to more easily sell and scale customized, programmable connectivity underpinned by app developer platforms grounded in telecom network APIs. Commercial APIs are already available for fraud detection, location, and device information as well as quality on demand. And IDC expects comms SPs to accelerate API volume and developer engagement.
"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 CPaaS entities," said Patrick Filkins, research manager, IoT and Telecom Network Infrastructure at IDC. "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."
