Moving into round two brought with it the metaphor of The concept of Telco 2.0 has been around for quite some time now. It has been around moving away from the competition with OTT and concentrate on forming complementary ecosystems that benefit both. Telcos began moving away from being mere carriers and becoming more visible within the value chain, essentially transforming from unidirectional to bi-directional business model.
This meant becoming an ‘enabler’ in the communication supply chain. From proving singular services, telcos started to facilitate an ICT and application platform that could connect diverse businesses and service providers (upstream consumers) to consumers (downstream consumers) . This model again saw telcos becoming the key link for a wider variety of consumers.
Telcos are uniquely qualified to become a central broker in this exchange economy because of the amount of data and network infrastructure already at their disposal:
- Information and Identity: The telephone numbers is a key piece of information that telcos own, and that’s linked to a host of other personal information on users. This also becomes a key identity maker and used for two-factor authentication by most OTTS to strengthen their security.
- Business Intelligence: Telcos have a lot of data from both mass and business users, and the tools to leverage that information to better connect service providers to consumers.
- Distribution: CSPs own the networks that OTTs use; the fiber, copper, coaxial and wireless broadband networks.
- Billing and Payments: Telcos have a well established payment relationship with the subscribers, and can become a secure payment broker, offering businesses the ability to seamlessly offer services to a large user base. And for customers, it means ease of payment, either through their mobile numbers or just by adding all payments to their monthly phone bill.
- Customer Care: CSPs already have a well established customer care network, with access to a large user base, and the experience to handle care. This makes them uniquely positioned to offer outsourced customer care services to businesses and service providers.
Now, there are several different technology and organizational aspects that need to be addressed to make the telco transformation complete. But a key peg in the whole scheme of things are APIs, especially when you consider how the whole model depends on the ability to connect and deliver information from massively disrate systems. APIs are the very instrument of transformation across technology, network, operations and business services.
We have taken a broad look at how telecom enterprises can leverage APIs to create new revenue streams. Here we try to break that down into the specific teleco APIs that can be turned to new products in the communications ecosystem.
Productizing Different Types of Telecom APIs
To begin with APIs were seen as a solution to expose different types of data and services and allow disparate systems to effectively communicate. However, there has been a recent paradigm shift in how APIs are perceived. They have moved beyond being a mere solution, and are increasingly seen as products that can be leveraged to open uniquely new revenue streams. This productization fuels design thinking and focus on who exactly are the consumers of any given API. And when these consumers are classified, telcos get three distinct types of APIs, with differing levels of complexity and RoI.
The first level telco APIs are internal, leveraged by their own applications that connect the telco and its various existing services to the consumer. These typically are low complexity API productization models that revolves around the core services. The data and information that arise from the existing infrastructure and network are bundled into API products developed solely by the telco, and made available for usage.
Some of the common API products in this category are location, messaging and identity services. And these can be leveraged by telcos own-brand applications and OTT services like:
General information: Applications that share general information about the telso with the consumers - plan options, mobile phone options, accessories available, store locator, ratings, and reviews. All this contributes to the bottomline by ensuring that the telcos offerings are accessible and available to the consumers within the digital economy that they are tuned in to.
Custom information and transactions: Applications that personalize the relationship between the telco and each of its consumers. The first strata of information and functionality being made available here are custom plans and packages for the users, usage data, upgrade eligibility, checking account balance, bill payments, changing account features, account maintenance (password, address, etc.). All of this can be easily made available by pulling information from different internal telco systems via APIs.
Leveraging the phone hardware: Using telco applications on a phone also makes it easy to leverage mobile hardware features and functionalities - GPS tracking, camera, digital wallet etc. These facilities, in conjunction with the telco’s internal APIs can be used to provide specialized services to their users. A few examples could be providing telco store locations on the app in combination with the phone’s GPS.
Besides this, internal APIs also streamline intra-organizational access to different data systems, make it easier and faster to build new solutions and applications. There’s ans estimated 5-10% savings in terms of development effort and lower QA testing requirements, with the adoption of internal APIs.
These set of APIs are all about creating a platform where other businesses and service providers can build upon. The key idea is to make telecom APIs access data from the telcos own and connected partner systems and make it available for other providers to leverage. Some common possibilities here are:
- Content services – streaming media, news, stock information
- Online services – social media, video chat, messaging, search, shopping
- Technology services – hosting (i.e. cloud), caching, payments
- Connectivity services – support for intermittent connectivity
- Device integration – smart phone, wired telephone, tablet, computer, television
- Business services – analytics, billing, accounting, coupons
Other businesses can build on these services with their value additions and rely on the telecom to manage the infrastructure and selected business services.
Specific industry partners can also use telecom APIs to build B2B offerings. They can rely on telcos to offer billing or messaging service APIs to act as key aspects of their service offerings. For example - OTAs can partner with telcos to provide log in/authentication to their portals, payments, notifications, and push custom phone plans for bookings to specific destinations.
With the rise of connected cities and virtually anything as a service, the phone number can become a singular digital identity for consumers. And almost any service provider, in any industry, can partner with telcos with offer their services, whether that’s by leveraging the data telcos have, or the network infrastructure, or even the phone hardware. All this is if telcos focus on identifying the emerging opportunities and building the right API ecosystem.
In all these cases, the API products being designed are typically medium complexity and offered with a degree of federated services. The monetization opportunities here are majorly volumetric, as in the third-party service providers are charged as per the volume of API calls made in any given period.
Partner APIs also make it easier to onboard new partners onto the telcos ecosystem and ensure quick time-to-market for new partner services. An estimated 5-20% savings accrue from partner APIs owing to the consistent and self-service processes, reduced onboarding time and improved partner experience
Several of the APIs used for internal and partner platforms can be opened to the public for greater use by third-party developers. This allows telcos to further monetize their data and network, while leveraging new revenue streams.
For example, open access to telco offers and plans data can be used by comparison applications and help drive more subscribers to the telco. Opening up APIs that securely expose user phone number and messaging can allow telcos to charge all third-party applications that use two-factor authentication via OTPs.
Several similar revenue options can open up for telcos with public APIs. However, in most cases, a single telco by itself may not have enough scale or access to data to become a truly game-changing resource for service providers. These are also high-complexity API products that could benefit from co-development models with a greater resource pool. And in such cases it makes sense for CSPs to come together on a federated API platform.
This is when several different telcos join together to offer a host of different APIs and share the cost of development and deployment. The federated platform, on the other hand, supports each participating telco with delivering their niche digital services, managing the full partner ecosystem, and providing common business processes as required. The federated platform also brings together the combined data of all telcos to offer more well-rounded and complete data sets for use by service providers, and manages revenue sharing for the participants.
Most telcos today are at the initial levels of API maturity with a broad vision and some basic APIs at play. Some have an API platform, exposing internal APIs like messaging or payment for third party providers. But the challenge is to scale their API program, unify different development tracks, and move them to a federated API platform. For this, telcos need to look for experienced teams that can take them from what they are, to where they want to be.
Srijan is working with leading telecom enterprises in the US, Europe and APAC regions. We are aiding these enterprises’ digital transformation journeys, leveraging data science and analytics, APIs, AI, machine learning, and chatbots to create tailor-made business solutions.
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