Will operators ever give up control and invite the wider world to join them in driving new digital service innovations that justify all that investment in their shiny new networks, via the promotion of standards-based APIs? By Sue Tabbitt.
As telecom operators refresh their digital transformation plans for 2019, they may need to consider greater openness as part of their vision. As long as they remain locked in their own discrete, proprietary worlds, they will be forced to fall back on their own resources, skillsets and experience to lead the digital charge – both internally, and externally. This not only limits their potential; it is also very costly.
Meanwhile, competitors with alternative mind-sets could be fostering all kinds of diverse ecosystems of applications and transformational customer experiences which drive traffic and revenue streams to their platforms. As well as multiplying the rewards, a partnership model means they get to dilute their own costs. Application programming interfaces (APIs) may have been hard for service providers to get their heads around in the early days, because they’re all about getting different platforms and software applications to connect and exchange data with each other – and telecoms grew up as a hardware-based industry.
As network functions and operations have become more reliant on and even based in software, though, the importance of having the right development and connectivity interfaces has become more appreciable. Too often operators’ vision has stopped there. Yes, they want to be able to provision their networks in a more agile, intelligent and cost-efficient way, via self-organising networks and AI-based problem-solving, for instance. Yet APIs, especially open ones (with open meaning open source, that is free to use and developed collaboratively), are even more crucial to enticing app partners who might create exciting new products and experiences that help to breathe new life (and profit ) into operators’ networks. This requires a big shift in mindset, however.
An open and closed case
“The whole premise of APIs is about opening up what you’re doing to partners in the outside world, but historically operators have been very closed,” says Patrice Slupowski, senior VP of digital innovation at Orange, and a passionate advocate of the API approach to driving digital innovation. “When the API story first began, 12 years ago, 99% of the effort was probably spent on making the case internally for doing this. As a result, the first APIs that emerged in 2008/9 weren’t very good and the take-up by developers wasn’t there.”
Today, API-enabled innovation is taking off outside the telco domain, producing some interesting use cases from specialist vertical Internet of Things (IoT) applications to new solutions for modern, ‘open banking’. Worried that they might let an important opportunity pass them by, and aware that their costs are rising while their income flat-lines, the more ambitious telcos are having another shot at developing API strategies.
Deutsche Telekom, for instance, has rolled out a single, global customer self-service mobile app which is now used by its operations in nine European countries. Using TM Forum’s Open API standards as the basis for the core central app has simplified DT’s development and support costs; meanwhile the APIs can be exposed externally so that DT’s partners can connect more easily to its telco operational and business support system (OSS/BSS) environment in their own activities. Which in turn starts to open up new possibilities.
“Many operators have multiple mobile operations across different European countries, a fully bespoke OSS/BSS per country, and very few shared services,” comments Aaron Boasman-Patel, VP of AI & customer centricity at TM Forum, which promotes a standards-based modular architecture that exposes business services as open APIs.
“This makes it possible to build out a shared capability that will support multiple operators in multiple countries on a single application base,” he says, adding that deployment via the cloud can make this even easier. Yet tangible progress seems to be taking a long time, and in most cases, operators seem to be focusing their activities on internal improvements rather than on innovating for the external markets that use their services.
Swisscom, like Deutsche Telekom, is focusing on streamlining the way it deals with its customers. If telcos don’t make it easier for startups to build innovative new apps that harness their networks, or transform the way customers use them, however, those potential partners will simply find a provider or platform that does. And before long, operators will be largely bypassed, as data feeds are channelled straight into the big cloud platforms.
Twilio, a communications API provider, is doing phenomenally well with its proposition of making it easier for app-based businesses to incorporate convenient call, messaging and SMS facilities into their online and mobile services. These include smart facilities such as proxy numbers that mask identities, so Uber or JustEat drivers can’t see and store customers’ personal mobile numbers (and vice versa) during their interactions, for example. “We exist because there was a gap in the market, a limit to what the market could do with telecoms,” explains Genevieve Haldeman, Twilio’s VP for corporate communications. “This whole area was a black box that no-one else could access, so we built a software layer on top for developers.”
Mutual need and benefit
Although operators might well see Twilio as competition, both parties need each other. “Telcos are key partners for us in maintaining the connectivity,” Haldeman says. “Meanwhile we allow developers to readily use their services in software on a global basis.”
So operators get to play in some interesting new use cases, and Twilio’s developer customers don’t have to strike up multiple relationships with different operators to exploit international market opportunities. But aren’t operators going to want a greater slice of the value-added action, as they wise up to the bigger opportunity Twilio has captured? “They could add their own value by improving the whole ecosystem, to underpin today’s innovation-driven economy – by improving uptime, the quality of lines, and numbers,” Haldeman suggests.
At the same time, Twilio is also introducing operators into interesting new areas, such as IoT opportunities; Haldeman references a partnership with T-Mobile in the US, designed to provide developers with all they need – the network connectivity, platform, APIs and tools – to bring appealing narrowband IoT solutions to market. Other similar alliances are on the cards in Europe.
Not an opportunity to miss
Operators would do well to keep an eye on where Twilio’s opportunities are unfolding. Prospects include solutions for keeping track of cities’ dockless bikes and scooters, and applications for connected health, transport, finance and retail – substantial markets where the customer experience is ripe for transformation, through improved real-time communications.
“There is so much greenfield potential,” Haldeman notes. APIs and cloud-based platforms are pivotal to rapid, efficient delivery of innovative new services, so the challenge for telcos is to raise their profile in this movement or be left on the fringes as utility providers. Fitbit and Google are exploring the potential for cooperation on consumer and enterprise health solutions. The plans involve Fitbit using Google’s new Cloud Healthcare API, providing consolidated data from across its users to enable new insights into the state of a nation’s health, and discoveries about conditions and their triggers.
There is no mention of a communications provider as part of the tie-up, perhaps because connectivity’s role is seen as a technicality rather than a strategic focus. Even though the reliability and security of connections will be paramount where patients are agreeing to transmit their own health data across networks to cloud platforms. Not all operators are hanging back, though.
Orange kicked off its current API drive in 2016, generating more than 750 APIs for its infrastructure in the first year, a figure which doubled in 2018. Although the vast majority of the toolkits are private ones for internal developers, to transform Orange’s own IT estate and customer relationships, up to 60 of the APIs are public facing. That is, they are available to external developers, startups and the B2B/wholesale market, to inspire new apps and services that harness and enhance the Orange brand.
One initiative has been to drive the use of SMS in Africa. Another involves food and agriculture. The model sees Orange work with partners to create an ecosystem of apps and services, using APIs that Orange has co-designed. “We bring the digital mindset, the platform and the APIs,” Slupowski says of the operator’s role. “Benefits to our partners include rapid implementation and testing; a major shift in the time and cost of development. Before it might have involved very lengthy projects and hundreds of thousands of euros to integrate carrier billing into an app; now it just takes a few days.”
Orange is probably making the most progress internally, he admits. “Here, transformation is happening despite strong legacy, which we’ve achieved with a lot of evangelisation, training for architects on how to design for APIs and so on.”
To this end, the operator has been training up teams in large numbers – 1,000 last year alone. Not just technical teams, but also marketing armies who can take the Orange API message out to developers and consumers of the tools.
There are developer challenges too, such as the LTE-M event Orange ran late last year to address practical issues faced by French train company SNCF. The signals Orange is sending to the market are important. “We’re seen as a modern provider. Our API strategy lets us play well with startups who prefer a ‘try and buy’ model,” Slupowski explains. Championing open standards is a big part of this, he adds. “We’re very active in initiatives by TM Forum, oneM2M and FIWARE. Collaboration is key to success, and open APIs help drive fast results. That’s how cities will generate maximum benefits for citizens, and so on; not by everyone being closed and proprietary.”
The luxury of choice is fading Although some other operators have yet to catch up in their thinking, the luxury of choice won’t always be there.
“Commercially there is a conundrum: open source means losing control and potentially not being able to access all the value of the applications that are developed,” says James Gray, director of Graystone Strategy, which advises telcos on subscription-based business models. “But the ecosystem requires developer innovation to succeed. Is this a Catch 22 situation? Possibly, and that’s why I expect to see a more open approach to APIs over the next three to five years from smaller challenger telco networks with more to win than lose.”