In a significant move to drive innovation in digital services, Ericsson and a consortium of global operators such as Vodafone and AT&T announced an ambitious joint venture. This endeavor aims to commercialize network Application Programming Interfaces (APIs) on a global scale.
For the past two years, APIs have been emerging as an essential tool for 5G monetization. Initiatives like the GSMA’s Open Gateway and The Linux Foundation’s CAMARA Project have promoted industry-wide API standardization. Ericsson stated that the new company will adhere to the principles and consensus established by these initiatives.
Ericsson will own half of this new entity, headquartered in the United States. The remaining shares will belong to the operator members. The primary customers for these APIs include hyperscalers, Communications Platform as a Service (CPaaS) providers, system integrators, and independent software vendors (ISVs). Notably, Vonage and Google Cloud will collaborate by offering ecosystem access to millions of developers and partners.
Jeremy Legg, CTO of AT&T, emphasized their long history of empowering developers with API tools. He described the new platform as a “global toolbox where the world’s best app developers can create exciting user experiences at scale.”
Similarly, Tim Höttges, CEO of Deutsche Telekom, highlighted how the new company complements their existing work with MagentaBusiness APIs. He noted the potential for new monetization opportunities and encouraged more telecom operators to join and expand this ecosystem.
Ericsson CEO Börje Ekholm, who led the $6.2 billion acquisition of Vonage in 2022, called this collaboration a defining moment. He emphasized the potential for increased monetization through a global platform backed by Ericsson’s technical expertise. This platform aims to provide a single connection for millions of developers, driving industry growth and innovation.
Despite previous impairments related to Vonage, Ericsson sees this move as instrumental in leveraging their deep technical capabilities to unlock new revenue streams.
A McKinsey and Company blog post published in February echoed these sentiments. It explained how network APIs could form the basis for new, network-enabled use cases. McKinsey projects that the network API market could generate $100 billion to $300 billion in additional revenue for operators over the next five to seven years.
An Ericsson representative clarified aspects of multi-party settlements in response to RCR Wireless News. Communication service providers (CSPs) will offer APIs to the new company and receive termination revenues based on traffic volumes. The new company will then combine and normalize these APIs for sale to developer platforms.
