As the mobile industry continues to congratulate itself for its progress with network APIs, a new report from Kearney threatens to spoil the party.

Nick Wood

March 22, 2024

3 Min Read

According to the consultancy, while developers are champing at the bit to offer exciting new apps enhanced by APIs, mobile operators aren't in a position to meet that demand.

Kearney carried out what it claims is the largest developer survey to date on the topic, and found that 60% of them would start using 5G APIs within a year if the technology was ready.

To hammer home the point, 63% of respondents place high or very high value on the enhanced connectivity that 5G APIs will bring to their projects, and 95% of developers are prioritising 5G APIs and enhanced connectivity in their road maps.

However, Kearney notes that only 46 operators globally have deployed the 5G standalone (SA) cores needed to unlock this value.

"This is the first real value creation opportunity we have seen for the industry in a very long time, but operators are not moving fast enough to take advantage of it," warned Kearney partner Jesper Larsson. "Without deliberate action soon, we may remain in an impasse for some time waiting for the real promise of 5G to come to life."

For more than a year now the GSMA and its operator members have been promoting the work they are doing with the Open Gateway initiative, an industry-wide effort to unlock the value of 5G through the coordinated exposure of standardised network APIs to the developer community.

It seems to be going well enough. Open Gateway is backed by almost 50 operators from all over the world, as well as major hyperscalers and equipment vendors.

A steady trickle of API-related announcements have been made. Recent highlights include Deutsche Telekom launching a suite of network APIs; BT tapping up Nokia's new Network as Code platform to monetise its APIs; and Singtel using APIs to underpin its new anti-fraud solutions.

At last month's Mobile World Congress (MWC), the GSMA cited research from McKinsey that claims Open Gateway and other API-related activities could be worth $300 billion to telcos between now and the end of the decade.

Kearney claims there is a risk this chance could go begging. It posits four possible scenarios, ranging from worst to best case:

In the worst case, termed by Kearney as 'The Impasse', operators develop APIs independently, leading to fragmentation and limiting their appeal to developers, and by extension their use. Operators see little value creation, and the industry fails to move up the stack from connectivity and infrastructure services.

One up from that is the 'Open Networks' scenario, where regulators or another external third party sets the standards for API development, and drives aggregation and distribution. This makes it easier for developers to integrate APIs, but most of the value is generated by the aggregators and developers' improved accessibility, with operators classed as 'secondary' participants with a diminished role in the ecosystem.

In scenario three, there is regional collaboration on development, and moderate fragmentation that limits API aggregation to a narrow range of device types, like mobile phones. This 'Mobile Success' scenario puts mobile OS makers in the driving seat, and they would therefore hoover up the lion's share of the value, followed by developers and operators.

Operators will be hoping to land somewhere near Kearney's best case scenario, where leading local and global CSPs collaborate to proactively set API standards that overcome structural differences, giving developers access to enhanced 5G network capabilities and alleviating their integration headaches. Outcomes of this scenario – which Kearney calls 'Limitless Use' – include widespread adoption, and strong developer pull and usage of first-party distribution channels.

It's hard to predict how this will play out. While it’s fair to say that while operators are off to a strong start with initiatives like Open Gateway, they also have an established track record of yielding their position in the value chain to mobile OS makers, cloud-based service providers and the like.

So while APIs do hold the promise of unlocking the value of 5G, how much value – and the direction in which it flows – are still open questions.

About the Author(s)

Nick Wood

Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.

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