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Recapturing Lost Revenue Through Telecom APIs
APIs enables the
operator to take a
Data as a Service role
which can provide a
secondary revenue
stream
Telecom APIs Can Help Recapture Lost Revenues
As consumers, we are in an Apps dominated age where there seems to be an application
developed for practically anything you can think of from IQ enhancement to monitoring energy
consumption of appliances. On one hand, as mobile network operators lose market share to
over-the- top (OTT) app providers of voice, messaging and other services, it is like gold slipping
through their fingers. On the other hand, there can be a positive side to this wave of activity
as some mobile network operators have begun opening up network capabilities via monetizable
Application Programming Interfaces or APIs.
Using APIs as a controlled method of accessing data provides a strategic advantage for the
mobile network operator through a role as a Data as a Service provider which can provide an
important secondary revenue stream. Telecom APIs allow the operator to expose a broad range
of critical data or functional resources to third parties or the OTT’s themselves as they provide
services to end-users. These end-users may be direct consumers or enterprise customers
creating B2B services.
Data that may be exposed via APIs include everything from functions such as M2M, WebRTC,
SMS, Rich Communication Suite, location, voice control, subscriber data, identity management or
number provisioning to core network QoS information for reporting on service delivery states.
Exposing the network’s core assets in this way to be reused, shared and monetised through
APIs elevates application programming interfaces from a development technique to a significant
commercial opportunity. And even though this opportunity is built on top of complex technical
infrastructure that includes data from legacy and third-party systems, it must be considered and
managed as any product would be.
A growing number of network operators are opening up portions of their networks through
robust application programming interfaces. This API-ification of the network is a big revenue
opportunity for service providers, and is expected to account for as much as 15% of top-line
revenue for network operators by 2017 according to Gartner.
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Recapturing Lost Revenue Through Telecom APIs
API-ification vs Ossification
The history of communications network operators is one of adaptation. In the past, things
were straightforward: whoever provided the wire to your home or business also provided your
communications services. That changed in the late 1990s with access unbundling; suddenly,
network operators didn’t need to own the last mile of access to own the customer relationship.
Today, we’ve entered a phase of communications where OTT providers and app developers
have unbundled the communications experience from the underlying network. This model
has proven disruptive to service providers, who now find themselves providing the network
infrastructure for these services yet are left out of their revenue stream. Even more disruption
is on the horizon, as the trends such as Chat bots and the Internet of Things bring billions of
new connection into the conversation, again with no clear line of revenue for service providers.
How do network operators stay relevant and profitable?
Embracing the API-ification reduces the operators’ risk of becoming bit-pipe providers of data
and voice. APIs are not a new development and have been around since the beginning of
structured programming. In fact, most IT management teams already rely upon common APIs to
facilitate internal interaction between business units/processes. Simply by documenting these
existing processes and procedures, these APIs may be opened to app developers as a starting
point to enhance the value of their applications.
Yesterday
SP=Carrier.
Carriers with last
mile have distinct
advantage
Compression felt
in the wholesale
industry
Access Separation
SP≠Carrier
SPs undercut each
other: value
destruction
Connecting business
through SIP
First 100 4G/LTE
networks launched
Internet of Things
Every sensor is
communications
endpoint
Voice and Messaging
simply an add-on to
a business process
(SFDC, Outlook) or an
application (eHealth,
Connected Car)
SP-Inside!
Carriers deliver
bandwidth + QoS (like
electricity, utility co.,
etc.) flat free – unlimited
end points
Telco APIs play critical
role in value generation
Value added SP provides
4th wave solutions.
Bandwidth included as
part of the service
Smaller SPs typically
bought out by large
providers who want to
reach consumers over
last mile
Content owners
buying out networks
to increase reach
– –
–
– –
–
–
–
–
–
Virtualization
SPs deliver value
over SIP (all IP),
leverage VNF as
a service
Universal
connectivitiy
prevalent in
developed world
Every browser is
a communications
endpoint
Video becomes
normal part of
communication
–
–
–
–
–
–
–
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Recapturing Lost Revenue Through Telecom APIs
Further on, API development should be managed just like any product built on top of a
network’s technical assets. As the API economy evolves, the shift towards a product
management approach will likely present hurdles to be overcome. Developing a mature discipline
for product marketing and product engineering as they apply to API development is uncharted
territory. Backbone tools to manage provisioning, metering and billing will be vital but only
serve to support the organization’s basic strategy. Topics such as API pricing, positioning
and monetization options are going to be critical. Questions to be answered at some point as
the business develops will include offerings à la carte versus bundles, charging per use, per
subscriber or per block of usage time for example.
How do APIs create value?
Communications network operators have a rich set of functionality that can be leveraged with
APIs to enhance the value of mobile applications, Chat bots and OTT services including :
–– Location, both for mobile subscribers and fixed subscribers (via home-based devices such as
wireless routers and set-top boxes);
–– User Data, with the caveat that personally identifiable information needs to be handled
correctly—something that network operators have done well to date through proactive
privacy policies;
–– Content that provide valuable insight into subscriber preferences and behaviour;
Communication APIs to embed robust voice, video and messaging services into applications;
Billing APIs to deliver a secure, reliable method for in-application payments;
–– Network APIs that ensure a higher quality of service/experience for applications such as
video streaming.
Telco
API
User Data
API
Communication
API
Other misc
APIs
Network
API
Content
API
Billing
API
Location
API
Telco API categories
There are two ways that network operators can use these APIs to drive revenue: through a
two-sided business model and indirectly. In a two-sided model, network operators continue
to generate revenue from their downstream subscribers while uncovering new revenue
opportunities through their upstream partners such as OTT providers and corporations.
Video streaming is a good example of where network operators can generate revenue on
both sides of the equation. Today, a video-streaming service may charge its customers
a flat monthly fee for unlimited streaming; an arrangement that currently makes more
demands on the service provider network with no commensurate increase in revenue. By
opening their network APIs to video-streaming providers, network operators can charge
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Recapturing Lost Revenue Through Telecom APIs
these providers a fee in exchange for high-quality streaming to the video provider’s
customers. This is different than net neutrality, by the way, since an added service (higher
quality video) is being provisioned in the network.
In an indirect model, network operators can insert themselves into communications for new
revenue opportunities. This will increasingly be the case as the Internet of Things evolves,
bringing with it more sensor-generated communications. For example, imagine a mobile app
that connects your home thermostat to your phone. This app would use the service provider
network to send messages back and forth, but currently would generate no revenue for the
service provider. By opening up location and communications APIs to the app developer, the
service provider could enhance the service and charge accordingly.
Telco
Side 1:
Upstream customers
Side 2:
Downstream customers
Developers
Retailers
Government
Media Companies
ASPs
Telco – Retail
$ $
Millions of
customers
Thousands of
segments
2-sided
Telco charges both Subscriber and Third Party Services for API usage
Telco/SPThird Party
Creator
Consumer
Consumption
$ $
$
Indirect
Third Parties develop Apps/Services that utilize network services (Messaging, Voice, Video, SMS, etc)
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Recapturing Lost Revenue Through Telecom APIs
Three Real World Examples
In order to stay relevant and profitable, communications network operators will need to become
digital service providers. This transformation is already happening today, through service
provider- led initiatives, in partnership with OTT providers and through the development of new
communications standards such as Rich Communications Services (RCS) and Web Real-Time
Communications (WebRTC).
Axiata – Asian-based Axiata is a great example of a service provider that has taken the
initiative to embrace and partner with the app developer community. Axiata launched their
digital services program earlier than most, back in 2012, and nurtured it through widely
publicized hackathons and university-based events. Today, Axiata boasts nearly 3,000 apps in
its network that generate more than 30 million API calls per month. Even more impressive is
the revenue-sharing arrangement that Axiata has with its developers—70% for Axiata, 30%
for the developer— proving the enormous value that Axiata has been able to demonstrate to
developers through its API library.
WeChat – On the OTT side, WeChat has shown that working in partnership with mobile
network operators can create more valuable services for business-to- consumer (B2C)
communications. WeChat is a popular OTT voice and messaging app in the Asian market, with
millions of active users. Working with communications service providers, WeChat has been able
to leverage billing and communications APIs to create a secure banking service for a large bank.
Banking customers can now use WeChat to open secure communications with bank agents to
check their balance, conduct transactions and ask questions from any location—at the office,
on a train, in a crowded restaurant—without the risk of being overheard on a phone call.
RCS & WebRTC – Ongoing developments with RCS and WebRTC standards create even
more opportunities for network operators to generate revenue through API exposure. RCS has
a number of interesting applications where network operators can enhance the experience,
such as transportation services. Imagine that you’re visiting a city and need to find the schedule
for the nearest bus station. An RCS app that had access to the user’s location data could
automatically push an interactive map to the user with times, routes and directions to the
nearest station.
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Recapturing Lost Revenue Through Telecom APIs
Four Things You Can Do right Now to Monetize Your APIs
Understanding the hidden value of your APIs, it’s time to turn that knowledge into action.
Building a community of API usage takes time and effort, but the reward is substantial. Here are
four things you should be doing right now to ensure that your business doesn’t miss the next
wave of digital services.
–– Define your API strategy. Identify the market opportunity and begin building a plan to
manage and monetize your API assets.
–– Evaluate your platforms. Are they open enough that developers and OTT providers have
access? Are they connected to your billing system so you and your partners can accurately
charge them?
–– Create API programs. Encourage API utilization with small scale grass-roots engagement
with business and developer communities. Developing a robust API economy will take time as
you built a community of users. Remember, if you don’t encourage app development, it will
likely happen without you.
–– Launch mini start-ups in your business. Start thinking like a start-up to understand what
APIs might be compelling to enterprises, OTT providers and app developers.
Remember: the most costly thing you can do is nothing. In 2017, digital services will generate
$225 billion in new revenue—money that will go to app developers and OTT providers alone
if network operators don’t find a relevant way to insert themselves into the revenue stream.
Opening your APIs and embracing the digital services revolution is the single most effective way
that network operators can stay relevant and profitable in the years ahead.
Three Ways That Xura Can Help You Do It
Xura’s Communications Suite (XCS) is an advanced digital services portfolio that enables
network operators to create their own rich, digital services and securely share their APIs with
OTT providers and application developers through telco grade messaging. Using Xura XCS,
network operators can monetize APIs in their network in several ways with a proven, carrier-
class solution:
–– Deliver a digital lifestyle experience. Using XCS, network operators can now provide
end-to-end RCS and WebRTC communications over their networks. This opens the network
to a host of new revenue-generating opportunities, from secure B2C chat features to online
gaming applications, and keeps subscribers engaged with an on-network experience.
–– Monetize RCS and WebRTC sessions. XCS allows app developers and OTT providers to
securely access key APIs to extend the value of RCS and WebRTC communications to their
subscribers— and enables network operators to add value to the communication beyond the
network connection itself. These APIs include access to billing, quality of service, roaming/
location information and other services, and can be charged on a per-dip or per-minute basis.
–– Promote the API-ification of your network. Exposing APIs to RCS and WebRTC services
is really just the beginning for service providers. In the broader API-ification of the network,
APIs will serve as the entry and exit points for a wide range of third-party applications and
OTT services. With XCS, the dynamics of the network evolve as network operators take on
the role of API managers, while charging third parties appropriately for this service.
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Recapturing Lost Revenue Through Telecom APIs
We are Xura
We offer our customers a pathway to next generation digital technology. Our thinking unlocks
the possibilities of no boundaries communications.
For over 20 years, we have been working with communication network operators and
enterprises all over the world, helping them to meet the needs of tomorrow’s multi-device,
multi-services consumers.
We offer clever ways to financially realize opportunities from existing technology, while guiding
customers to richer communications solutions by creating innovative products and services to
disrupt digital.
We help 8 out of the top 10 global operators reach over 3 billion endpoints.
We are the enabler making the future of digital communications services happen.
Xura. We think beyond.
