Ericsson, the Swedish telecommunications giant, has announced a strategic partnership with Deutsche Telekom, one of Germany’s leading telecom operators, to offer innovative software tools targeting developers and business customers. These tools are designed to harness the potential of network application programming interfaces (APIs) to generate additional revenue streams for telecom operators.
The primary focus of this collaboration is to leverage the Vonage platform, which Ericsson acquired for a significant $6.2 billion in 2022. By utilizing this platform, Ericsson and Deutsche Telekom aim to empower developers to create novel use cases grounded in mobile network capabilities.
Network APIs are the key enablers in this endeavor. They allow businesses to tap into the functionalities of telecom networks, offering a wide range of opportunities. For instance, they can be used to enhance the speed of 5G networks when necessary, locate a customer’s phone in a store during a transaction to prevent fraud, and provide various other valuable services.
Ericsson’s CEO, Borje Ekholm, sees the API business as a standalone revenue generator. The collaboration with Deutsche Telekom, and the revenue-sharing model associated with it, is viewed as an attractive proposition for both companies. This approach aligns with the broader industry trend of exploring new revenue streams beyond traditional telecommunications services.
According to forecasts from telecom research firm STL Partners, revenue generated from mobile network APIs is expected to surpass $20 billion by 2028. This projection highlights the significant growth potential in leveraging APIs to create value-added services and applications.
Notably, more than 140 companies are actively participating in an open-source project named CAMARA, dedicated to defining, developing, and testing network APIs. This collaborative effort underscores the industry’s commitment to driving innovation through API-based solutions.
Telecom operators have invested substantial resources, amounting to hundreds of billions of dollars, in building out 5G infrastructure. With the groundwork in place, they are now seeking ways to monetize their investments by offering faster and more versatile network connections to businesses. This includes catering to a wide range of industries, from enabling automation in factories to providing high-speed, low-latency connections for critical applications.
Borje Ekholm emphasizes that telecom operators are eager to diversify their revenue streams. With the capabilities offered by network APIs, they can introduce new offerings and features to customers. These may include services related to network speed, latency, location authentication, and various other applications derived from the capabilities of telecom networks.
In essence, the partnership between Ericsson and Deutsche Telekom is positioned to tap into a previously untapped source of revenue for telecom operators. By providing developers with the tools and platforms they need to create innovative solutions, the collaboration aims to unleash the potential of network APIs and drive growth in the telecommunications sector.
The initiative aligns with the broader industry trend of digital transformation and the convergence of telecommunications with other sectors, such as industry 4.0, IoT (Internet of Things), and edge computing. By enabling businesses to harness the capabilities of advanced networks, telecom operators can play a pivotal role in shaping the future of connectivity and innovation.
In conclusion, Ericsson’s partnership with Deutsche Telekom to leverage network APIs underscores the telecom industry’s commitment to exploring new avenues for revenue generation. With the potential for substantial growth in the API market, this collaboration positions both companies to seize opportunities in the evolving landscape of telecommunications and digital services. By empowering developers and businesses to create value-added solutions, Ericsson and Deutsche Telekom aim to unlock the full potential of mobile networks and drive innovation in the industry.
