Rethink RAN Research says five-year view indicates initial, annual market value of $6.6 billion, as edge market eludes operators and customers’ main focus is fraud prevention
According to a new findings by Rethink RAN Research, Network API Forecast 2025-2030, there are no indications that Network APIs will radically improve mobile network operators’ fortunes in the short term, which in this instance is up to 2030.
The report explains that for the big mobile vendors – by which it chiefly mean Ericsson and Nokia – Network APIs are a way to sell more software, services and equipment to mobile operators, which are seeing results from “nascent experiments”.
Uncomfortable at the edge
It explains that the main problem for mobile operators is that Network API “has an uncomfortable interplay with the edge computing trend”. This is due to mobile operators “suffering from a lack of brand power, when it comes to selling compute services in competition with the likes of AWS and Microsoft”.
It also points out that are no commercial use cases currently that rely on attributes that only mobile operators can provide because even the lowest possible latency can be provided through co-location of edge compute capacity “effectively inside the RAN”.
For applications like autonomous vehicles, both aerial and terrestrial, there is a good case for operators to provide edge compute, but there is little overlap between this use case and today’s Network API functions.
Some success, violent clashes
Rethink RAN Research says mobile operators will have some success in Network API, “but our view is that this market in the near term is leagues away from what the likes of McKinsey suggest it will be”. For the next five years, customers’ interest will mostly be around identity management rather than spinning up network slices on demand which are “floated by the most ardent [Network API] zealots”.
The clash between what is possible and what has been promised will be violent, according to the research house, “leaving a wake of severe disappointment”. This is because almost all announcements so far focused on number verification and SIM swap checks to fight fraud while “We have seen no demand for the ‘Quality on Demand’ (QoD) angle, which promises to enable the likes of Netflix to dynamically spin up a network slice so that a customer can rapidly download a library before stepping onto an airplane.
“Further, we remain unconvinced that this is something consumers are going to leap at the opportunity to pay for at scale, and how many such opportunities exist for the [mobile operators] to turn a profit on?
Ericsson overpaid?
Rethink RAN research adds, “At the time of writing, it looks like Ericsson’s $6.2 billion purchase of Vonage, which helped kick off this wave of Network API speculation, might have cost its CEO his job.
“New leadership would likely be less optimistic about the trend, and definitely warned off from any more Network API acquisitions, but thankfully Aduna is now somewhat independent of Ericsson, and so its momentum should not be particularly derailed if there is a CEO shakeup.”
Comparisons don’t add up
Finally some comparisons by the research house with other sectors don’t make comfortable reading. It estimates that the initial annual revenue derived from Network API is some $6.6 billion (€5.87 billion) compared with: Big Tech revenue (around $1.79 trillion in 2024); the IT Services market (~$1.5 trillion); global telecoms revenue (~$1.13 trillion); mobile revenue (~$745.7 billion); cloud computing (~$605.3 billion); Cybersecurity (~$207.96 billion); and CPaaS [Communications Platform as a Service] (~$18.28 billion).
