Explosive Growth in Telecom APIs: Forecast to Hit $6.7 Billion by 2028
The global market for telecom and network APIs is projected to reach $6.7 billion by 2028, marking a significant growth from just over $700 million in 2023. This forecast, provided by International Data Corporation (IDC), indicates a compound annual growth rate (CAGR) of 57.1% over the 2023–2028 period.
Transformative Growth in Telecom APIs
Historically, communication service providers (SPs) have excelled in delivering mobile connectivity on a large scale. This strategy has been lucrative, with connectivity generating steady revenue growth and profits over the years. However, the landscape has shifted with the entry of third-party entities such as CPaaS, cloud providers, and digital platform players. These entities have captured digital opportunities and developed extensive developer ecosystems, often relegating traditional SPs to mere connectivity providers.
The Shift to Platform-Based Commerce
As the value of basic connectivity has commoditized, there has been a notable shift towards digital and platform-based capabilities across industries. Platform-based commerce has enabled rapid marketplace growth and expansion, a trend that communication SPs have been slow to fully embrace.
5G Networks and API Exposure: A New Opportunity
The integration of 5G networks and API exposure offers a promising opportunity for communication SPs to reestablish themselves as key players in the digital landscape. By leveraging telecom network APIs, SPs can more easily sell and scale customized, programmable connectivity services. Commercial APIs are already available for various functions such as fraud detection, location services, device information, and quality on demand. IDC anticipates a significant acceleration in API volume and developer engagement among communication SPs.
Industry Insights and Predictions
“While the telecom industry has a mixed history of API monetization, its latest focus on novel network APIs is being championed by all leading telecom service providers, with global support from key API aggregators such as hyperscale cloud providers and leading CPaaS entities,” said Patrick Filkins, research manager at IDC. “Even so, the long-term success of these efforts will largely depend on the broader ecosystem of API aggregators and systems integrators who can create the necessary value propositions for market education and adoption.”
Conclusion
The forecasted growth in global spending on telecom and network APIs highlights a significant shift in the telecom industry. By embracing the potential of 5G and network APIs, communication service providers have the opportunity to move beyond basic connectivity and offer advanced, programmable services that cater to the evolving needs of the digital economy. The success of this transformation will depend on the ability of the broader ecosystem to educate the market and drive adoption of these innovative solutions.
