Telecom operators are finding themselves stuck between a rock and a hard place; neither the services nor the customer are willing to foot the bill when it comes to bandwidth for OTT services. With increasing mobile usage and customers demanding constant access to these network saturating services such as Google, Skype and Netflix, telecom bandwidth is becoming a treasured commodity. Ovum has predicted that global revenues for telcos will decline by 1 per cent between 2017 and 2018, so the future looks pretty bleak.
But APIs are the hero that can transform the fate of network providers, offering them the chance to take back the reigns of control over their dwindling profits and their customers’ spiralling bandwidth usage. Firstly, telcos need to understand the networks unique value and what benefits they can offer through an API. Secondly, they need to identify the most effective business model.
The Big Head approach to sharing APIs
Exposing the API via the Big Head model opens the door to specific partners and third parties, giving telcos the opportunity to compete with OTTs. By sharing their APIs with bandwidth-devouring services, such as Netflix and Whatsapp, telcos can better regulate their usage and charge them for the extra bandwidth they need. Telco APIs are also hugely valuable to application vendors because their gold mine of information can significantly improve the accuracy of apps. This means the end user receives a better product, and telecoms can bring in new sources of revenue by charging developers for accessing their APIs.
The Big Head model also allows telcos to better provision services via partners. A popular UK Mobile Network Operator, with 4 million active customers in the UK and over 20 million users worldwide, has used API technology to grant supermarkets and retailers access to specified information from one central platform. Their retailers are then able to sign customers up to services more quickly because they are able to access the information they need instantly, and new services can be brought to market in a fraction of the time.
Inviting innovation through the Long Tail method
The second key model, Long Tail exposure, sees APIs being shared with the broad community of external developers. Sharing the network with this vast pool of talent gives developers the chance to profit from what the network has to offer: unrivalled location information, highly developed billing mechanisms and a community of devices that rely on the network to fully function. And in return, end users receive better products and telcos can bill external developers for accessing the API, forming partnerships based on give and take.
A Brazilian mobile operator opened up their APIs to outside developers to great effect. Developers used the network to rapidly deliver innovative new services such as mobile games, sports and news from a range of providers. Through this, a hugely popular football app was developed that enabled fans to stay up to date with the latest scores and interact live with other fans throughout matches. The app relied on the network’s unique resources, and in return, drove revenue for the network without them having to create the app themselves.
Internal sharing for a smooth ride to customer satisfaction
Last but not least, sharing the API internally, with programmers that work for the company, allows them to develop better operations solutions. Internal exposure gives programmers the opportunity to create applications that promote fast and easy resource sharing by allowing them to integrate services across the entire organisation. The integration of cloud services, for example, allows telcos to transfer data from the cloud to on premise storage efficiently, getting the information where it needs to be more quickly. With their revenues on the rocks, smooth operations are imperative for reducing the time-to-market of new services from months to weeks, keeping customers satisfied.
Once telcos have identified the model they want to use, it’s essential that APIs are prioritised. They cannot simply be setup and left to run. There are four pillars that form the foundation of the successful delivery of APIs: performance, reliability, identity and trust, and efficiency.
To achieve these four elements, each of the models will need to be supported by an API Gateway otherwise telcos could be at risk of leaking sensitive data. In turn, this will damage brand image, deter customers and ultimately lose the company millions of pounds.
API Gateways provide enterprises with a clear vision of how developers are using their code, internally and externally, allowing them to fix issues quickly and prevent bottlenecks from disrupting the data transfer process. By governing the flow of data from start to finish, enterprises can be confident that data is reaching its intended target quickly and efficiently.
By 2018, it is expected that 68% of all web and mobile applications will utilise APIs, which translates to a $157 billion global revenue for the Telecom Network API market. There’s a huge market up for grabs and time really needs to be dedicated to managing and making the most of API services. Creating and nurturing a developer community to drive API adoption, for example, will go a long way to ensuring the success of the shared API.
API technology could be the answer to telcos’ prayers. But with such a rich array of data in the playing field, it is vital that telecom operators employ the right technology to ensure their APIs run smoothly.