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August 27, 2014

Crucial for Operators Looking to Grow the US $1 Trillion Telecom Market are Carrier APIs

ABI Research has a new report out this week entitled “Telecom APIs and Monetization,” which is part of the larger Telco Big Data Analytics and CEM report. According to the report, operators look to minimize risk, maximize profitability and achieve a competitive advantage, which makes sense. Tier One operators have been using of big data and network analytics to improve network operations. Operators will benefit with big and small data analytics regardless of their size.

These movements toward the data-driven enterprise align with the network evolution to SDN/NFV and result in a radical change in operator business practices. Customer Experience Management (CEM) also benefits from the adoption of subscriber centric analysis and management.

ABI Research feels that Telecom APIs themselves are not a revenue item, but should really be looked at as more of the table stakes needed in order to continue an operator’s growth. APIs offer telecom operators an opportunity to open up new revenue streams, and to generate extra revenue from their existing customers. Telecom APIs make it easier to create new services, as well as embed telecoms in many business ecosystems.

Telecom application developers are the ones making this a reality. An Application Programming Interface is a set of standard software functions an application can use. The API forms the interface between the application and the resources in the device. An API is also known as middleware. The use of APIs makes it possible to develop applications and services independently of the underlying device it will run on.

Variety is the direction that ABI Research feels APIs can be used most effectively. If operators can offer various data plans and innovative services designed for different subscribers by creating an overall data plan, along with service platforms with specific targets in mind, they will find the most effective way to monetize from APIs.

Companies such as Ericsson and Nokia are leading infrastructure vendors. They work with operators to develop APIs for monetization, optimization. They create new business models, increase efficiency, while at the same time lower costs. Telecom APIs are needed to continue the growth of the U.S. $1 trillion telecom market.

Sabir Rafiq, who is an ABI Research analyst, had the following to say on the subject “Operators are continuously looking to gain a competitive edge and at the same time avoid losing revenue to low-cost OTT applications. Telecom APIs help operators build a ‘sustainable moat’ which draw OTTs into a cooperative position, open new markets and to generate extra revenue from existing customers. It is important for operators to consider the bigger picture of APIs, as this is a long-term way of growing their businesses and not just a one-time thing.”

The report expresses that various enterprises are now using APIs to allow them to collaborate more closely with external partners such as application developers, as well as third-party service providers. As API usage increases, monetization then becomes important. The feeling is that by monetizing, API performance can be monitored and then adjusted if necessary to ultimately ensure high service at all times.




Edited by Alisen Downey


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