Sing An API Song: All Together Now!

Where’s the money in network APIs? The debate at TelecomTV ’s DSPLeaders event showed there are successes but plenty of challenges to fix, and some divergence on the best focus. My personal hunches are that a bit of narrative simplification would be a Good Thing, and that fraud reduction and ID is the key near term bet.

I will examine this further in our next report, 'The State of CPaaS 2025,' for the CPaaS Acceleration Alliance . We are also collecting network API case studies in partnership with the GSMA , so if you have any of these you would like to share and promote, please let me know.

DSP Leaders Debate

At DSP Leaders (with many thanks for the invitation and top hospitality Sean Carr and Danielle Rios ) we heard more from a panel chaired by Guy Daniels about how the industry is trying to pull together and create momentum around the GSMA Open Gateway initiative.

It is a complex ecosystem, and the stakeholders have many different interests and goals, sometimes even within the same organisation (wholesale vs enterprise in telcos, for example).

While it is convenient for analysts like me to say “the industry needs to do x” the reality is that the industry comprises many different voices and getting them to sing the same song at the same time is challenging. That does not mean it is the wrong idea.

What they said at DSP Leaders

Peter Arbitter , CCO, Aduna Global, who co-chaired, said the industry was determined to learn from past failures in driving telco APIs, and 12 operators had therefore created Aduna to help overcome challenges of achieving global standardisation and reach, and increasing its focus on customers and developers.

Nonetheless, challenges remain, with “over 50% telcos still not really focused on APIs”. The CPaaS industry however, is ready to benefit from APIs, although it seems to feel to some telcos as if they are again investing in capabilities for others to monetise.

Standardisation is still a struggle, as many operators want to champion their own standards. The industry needs to “become a little less egocentric” and find ways to adopt a collaborative mode in some areas.

Positive signs are that telcos have managed to collaborate, and Aduna is a step change. It involves the US telcos and is finding significant interest on demand side - the first HSP has stepped in on number verification, for example.

Peter had three asks, that the industry must: 1) shift gears, and move on from Mobile Connect; 2) accept standards that are not ours; and 3) collaborate to build the market.

He said that success would be marked by the evolution of new monetisation tools, and ultimately measured in $. He hopes that telcos are closer to understanding pain points and are collecting much valuable information. For example, he was surprised to end up with so many conversations about age as part of KYC (Know Your Customer) regulations at MWC, and believes that hyper-personalisation in European Retail will be the next big opportunity.

Aduna will be making announcements in a few weeks about partnerships with SIs (Systems Integrators), as it does not believe telcos have all the access it needs to the real customers in enterprises, for example sales and logistics organisations (Peter felt that telcos are more connected to procurement).

Alex Reichl , VP, Mobile & API Services, Liberty Global , built on the theme of success, saying it started with one API being launched and one $ made. Now we need a journey with the right APIs launched across industry and across borders. She saw little value in operators individually launching single APIs, e.g. SIM swap.

Geoff Hollingworth , CMO, Rakuten Symphony , championed customer focus. He said he thinks success has nothing to do with APIs, it is “real world attachment”, and asked “why aren’t we doubling down on fraud?” He argued that Google, for example, had built its huge value by solving a big problem brilliantly well. Why doesn’t telecoms focus hard and accurately on solving the fraud question: “why do we keep trying to find the unicorn answers?” (e.g. slicing). He also pointed out that any software-based company has delivered through APIs for the last 20 years.

He mentioned as an example a bank which cited reducing fraud false positives as a key KPI, as each might cost $60 to resolve and annoys customers. Also, “can we trust other people online? 91% do not answer calls if they do not recognise the caller - this is not a fringe opportunity!”

Henry Calvert , Head of Networks, GSMA, answered that the measure of success is for enterprises to have simple and consistent way to collaborate with operators, with each operator offering the same API in the same version.

He said there is a coordination challenge across the industry but there is nonetheless a desire to coordinate. He felt that the industry is “very young - a little child” in terms of its development in this ecosystem, and that telcos have a nascent understanding of developers, and enterprises have a limited understanding of what telco APIs can do. Alexandra supported Henry’s call for better cross-industry education.

Henry felt that operators could do a better job in serving enterprises, in addition to working with CPaaS providers. He wanted operators “make it (APIs) simply available to developers in sandboxes”.

Henry concluded that “we need to make money on QoD (Quality on Demand). For example, in some places passport control is all on video, and solution providers also need reliable quality insight on where the nearest edge server is.”

Where’s the money?

My hunch is that Geoff has a point. If you are trying to get everyone to sing the same song, it is helpful if it is as simple and easy as possible.

So, focusing on a main narrative around fraud would seem to be a good idea.

After all, as Lord Chris Holmes pointed out on day 1, Fraud and Cybercrime is the third largest global economy after the US and China.

That sounds like money that is worth chasing for telcos, even at the expense of adopting someone else’s technical standard.

So my thoughts are why not fix that, and start by getting the ecosystem excited with something that works and clearly valuable (i.e. fraud)? In the meantime, by all means work on QoD and the other APIs in the background to be ready when the market for them is clearer.

I understand that operators are keen to add new monetisation streams, and it is not a matter that QoD and other API opportunities are not important, valuable or shouldn't be done. It is rather about priorities and getting a large group of people energised on a common goal, and that is hard to do with a complex and fragmented narrative.

My former STL Partners colleagues Darius Lloyd and Amy Cameron have an API revenue forecast of $10bn by 2030 (soon to be updated, I understand), and I believe this reflects a moderate uptake in fraud areas in the initial period, followed by growth in others. I think every other analyst house has a similar position, but I don’t know for sure - Camille Mendler, Francis Haysom - what do you think?

Of course, get the Big Team singing going stronger, and who knows where we could get?