Ericsson & Telecom Operators jumpstart Network API
Initiative
September 25, 2024
By: Courtney Munroe
IDC'S QUICK TAKE
In September 2024, Ericsson, along with Telecommunications partners announced a joint
venture to offer network APIs. The new company which will be jointly owned by Ericsson
and a dozen telecom operators was initiated to accelerate the adoption of network APIs,
which were initially developed by the GSMA Open Gateway Initiative (OGI) and CAMARA
initiatives.
M&A ANNOUNCEMENT HIGHLIGHTS
The new copy includes Ericsson and initially twelve primarily Tier One network operators
from multiple regions. The telecom operators will own 50% of the new entity: they are
América Móvil, AT&T, Bharti Airtel, Deutsche Telekom, Orange, Reliance Jio, Singtel,
Telefonica, Telstra, T-Mobile, Verizon and Vodafone. Ericsson will own the remaining 50%
of the new company. The new company will help to streamline and provide momentum to
the sporadic start of the OGI and CAMARA initiatives, which has failed to produce the
requisite standardization to facilitate the development of APIs that can be scaled across
multiple telecom platforms simultaneously.
IDC'S POINT OF VIEW
The new JV between Ericsson and Telecom operators is a welcome reset and is a strategy
that Ericsson most likely envisioned with its acquisition of Vonage in 2021. While the
Vonage led initiative was an admirable effort, it did not achieve the scale and consistent
effort across a wide range of telcos. The Ericsson Vonage effort was successful in signing
several operators to its platform operating under various models. Deutsche Telekom
signed the most comprehensive agreement with Ericsson. The DT MagentaBusiness API
platform powered by Vonage and Ericsson was a white label platform portal deployed on
top of Vonage's Communication Platform (VCP) later renamed the Global Network
Platform (GNP), that allowed DT to resell both communications and network APIs.
Ericsson signed agreements with several other telcos including Orange, Vodafone, AT&T,
Verizon, and others that lacked the scope of the DT effort. The agreement with the latter
companies provided the telcos with Ericsson/Vonage technology expertise to help them
deploy and market the OGI and CAMARA network APIs. The results were starkly uneven. A
few, including Telefonica and Orange were successful in garnering internal support and
IDC #lcUS52630124
investment, others struggled to convince their senior executives on the viability of the
Network API business model. Other CPaaS companies working with Telcos struggled to
realize the vision of truly standardized API portfolio that facilitated one-and-done API
coding by developers.
The Ericsson Telecom Operator venture has the potential to accelerate the Network API
segment. The ownership stake in the JV gives Telcos an incentive to invest, and work with
an end-to-end partner as opposed to just participating in a standards body. As more
service providers join the effort, it will provide scale and operational efficiencies, as well as
additional sources of investment. It will also be more appealing to developers who can
develop to a global business and consumer audience. Another positive factor is the
inclusion of Google as a partner, which provides a consistent and secure cloud platform
for the venture.
However, the Ericsson JV is not the only game in town. Another major initiative was
Nokia's launch of its Network as Code API platform, in concert with the GSMA initiative in
2023. Nokia currently works with Infobip as a key downstream partner. The Nokia
Network as Code platform is a centralized effort with a streamlined portfolio of APIs
including Network Quality, industry specific IoT, and video streaming capabilities.
The initial CAMARA network APIs focused on the anti-fraud and security segment
including SIM Swap and identity, with APIs for location services, network performance and
other segments to follow. However, the early APIs also have earlier, non-CAMARA
versions published in concert with CPaaS partners, which telcos will most likely continue
to host for some time, until the JV ramps up and gain critical mass.
The business model for the JV to for revenue and profit sharing is still vague, although it
calls for Telcos to market their APIs to developer platforms including CPaaS and Systems
Integrators. The Ericsson Telco JV is not exclusive and besides Nokia, other IT vendors will
most likely implement their own platforms, leveraging the existing GSMA and CAMARA
framework. Competition will be good for the industry and will push the envelope to
success. However, because of its substantial investment in network APIs, and its deep
experience working with Telcos, Ericsson has an advantage with this JV.
IDC is forecasting a potential market for network APIs of just under $7 billion by 2028,
with revenues that will be shared by Telcos, CPaaS platforms, Systems Integrators, and
other IT Vendors who will enter the fray. It will facilitate a new era of agility for Telcos
provided they take the bold and at times painful steps to reorganize to realize the vision
of this new business model.
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