MWC 2024 highlights rapid adoption of Open Gateway initiative, network API deployments

Introduction

In the opening keynote session at MWC 2024, GSMA Director General Mats Granryd highlighted the Open Gateway initiative as a key factor for "unlocking the potential of 5G networks" in an API-based world. Also speaking in the opening keynote, GSMA Chairman and Telefónica CEO José María Álvarez-Pallete spoke of the need for "API-centric models" to address market requirements for capacity, speed and quality of connections, particularly for new products and services such as ChatGPT and generative artificial intelligence. Their remarks placed a spotlight on the GSMA Open Gateway initiative, and the potential that communications platform as a service (CPaaS) and open network APIs have for mobile network operators (MNOs), helping them monetize their 5G infrastructure investments.

The Take

The shift to an API-centric business model will not be an easy task. In addition to the technical challenges involved, this will require a deep understanding of the use cases that can be addressed with network APIs. MNOs will also need to enable their sales teams to execute on the go-to-market plan for new digital services they are likely not yet familiar with. Furthermore, the pricing model for different network APIs remains a work in progress. While there is still work to be done, the Open Gateway initiative has made remarkable progress over the past 12 months, as evidenced from a growing number of live deployments and the speed with which the initiative is being adopted. If adoption continues to expand at a rapid pace, network APIs could present MNOs with new ways to monetize 5G infrastructure investments. This, in turn, could position MNOs as a primary growth engine for the CPaaS market over the next five years.

Background

Launched a year ago at MWC 2023, the GSMA Open Gateway initiative is a framework of network APIs that aims to streamline universal access to telecommunications networks and provide this to developers. The initiative launched with eight network APIs — SIM Swap, Quality on Demand, Device Status, Number Verification, Simple Edge Discovery, One Time Password SMS, Carrier Billing-Check Out and Device Location — with plans for additional APIs.

MWC 2024: Key takeaways

Below, we summarize updates from MWC 2024 in four key takeaways, highlighting how the Open Gateway initiative has advanced over the past 12 months, and how we expect it will continue to evolve in the coming year.

• The GSMA Open Gateway initiative is making strides. This is evident from the number of operators that have signed up, as well as the number of live deployments. Over the past 12 months, 47 operators joined the initiative, and operators in Brazil, Germany, Indonesia, South Africa, Spain and Sri Lanka have live deployments.
• Network APIs level the playing field for MNOs. Large CPaaS vendors dominate the segment, with the top 10 accounting for 72% of total revenue in 2022, according to our CPaaS Market Sizing and Forecast (see figure). Top tier players like Infobip, Sinch AB, Twilio Inc. and Microsoft Azure Communication Services have achieved significant economies of scale, making it difficult for new vendors to enter the market. However, network APIs present an opportunity for MNOs to bring to market new digital services that could help them reposition and capture a larger share of the CPaaS market.
• Telcos could drive further growth for CPaaS. New digital services such as the next generation of mobile authentication, fraud detection and prevention, and others should complement, rather than compete with, existing CPaaS offerings. We believe these services could expand the overall market opportunity for all players within the CPaaS ecosystem — including CPaaS vendors, telcos and CSPs, and developers and enterprises.
• CPaaS enablement will play a key role. CPaaS players like Infobip, Nexmo (now Vonage/Ericsson) and Sinch (fka CLX) invest heavily in R&D. This represents a primary barrier to entry. CPaaS enablement (i.e., vendors whose go-to-market strategy involves enabling CSPs and telcos to deliver programmable communication services leveraging their own core infrastructure) will likely play a key role, helping telcos bridge the technology gap and accelerate their product road map. These vendors offer revenue share, low/non-capex deployment options, and sales enablement and support, helping MNOs reduce time to market for launching new digital services.

Conclusions

Despite playing a critical role within the CPaaS value chain, MNOs have chosen to remain behind the scenes, with their participation largely limited to commodified services. The GSMA Open Gateway initiative and network APIs present an opportunity for MNOs to launch new digital services, expanding the scope of CPaaS and programmable communications beyond the API layer to include capabilities at the network layer, and with this enable more advanced and secure customer interactions. These services represent an opportunity for MNOs to reposition within the value chain and monetize their 5G infrastructure investments. More importantly, we believe it could have a positive impact, significantly expanding the market opportunity for the entire CPaaS ecosystem.