Open Gateway API monetisation (Part 2): The process of API Monetisation

The Open Gateway API framework is poised to facilitate a global boom in network API revenue through API monetisation. However, not all communications service providers are aware of the strategies and technology required to monetise APIs through Open Gateway.

API monetisation Part 1, discusses potential API revenue and the importance of Communications Service Providers (CSPs) staking an early claim. Now, we explore the benefits of standardised APIs, the process of Open Gateway API monetisation and various API business and charging models.

The benefits of standardised APIs

For years, CSPs have been developing internal APIs with varying standards and configurations. Subsequent API complexity and 4G limitations have hindered innovation and monetisation. By standardising APIs, CSPs can gain multiple benefits through external sales and leveraging and enhancing internal resources.

Revenue generation – APIs are increasingly seen as revenue generators, and several business models exist for monetising APIs. For example, GSMA’s Open Gateway project standardises APIs, making them easier for developers to work with.
Instead of countless bilateral negotiations, API aggregators, via Open Gateway, enable access to multi-network services through a single platform. However, to avoid being sidelined, CSPs must claim their stake early in this API monetisation business model.
Reduced costs – Shared API parameters simplify management, making it easier to identify and correct bugs. Additionally, improved API management also speeds up integrations and configurations.
Increased scope and scale – Using standardised APIs internally makes it easier to leverage existing resources to deliver new products and services faster.
Quality of service – Standardised APIs deliver increased uptime, throughput and reliability by seamlessly interoperating. Having a standardised level of quality assurance also speeds up decision-making processes, cutting costs and bringing products to market faster.
Futureproofing and increased interoperability – Easy interop enables future revenue generation, reduces costs, streamlines multiplatform functionality, and enables greater innovation.

When designed around end-user experience, standardised APIs deliver better outcomes, such as improved app navigation and integration, and fewer faults. Distributed over 5G and with AI integrations, user experiences are going to be radically transformed by the API revolution.

The process of Open Gateway API monetisation

In Part 1, our SWOT analysis features GSMA’s Open Gateway project as a strength, as standardised APIs facilitate API monetisation. Open Gateway requires CSPs to expose their network through secure APIs.

Operators can use a Network Exposure Platform (NEP), such as Squire Technologies’ Open Gateway, for API enablement. The NEP provides GSMA Open Gateway API standardisation, turning complex, internally developed APIs into easy-to-use APIs for developers.

Following standardisation, API aggregators give developers access to multi-network resources via a single access point. The project eliminates the need for multiple bilateral API agreements and opens Network-as-a-Service (NaaS) opportunities at scale.

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The process of API monetisation through Open Gateway API standardisation

There are many API revenue generation concepts, like API-First, Product API, API Product, and API-as-a-Product. These concepts cover API design to API marketing, and the approaches vary in their suitability for different businesses.

Some approaches require more resources to implement and manage, but could generate decent revenue. Other approaches fit low-cost strategies.

However, two concepts support successful API monetisation.

Have a complete view of API exploitation. View APIs as a means of leveraging resources to fuel revenue generation as well as products with a lifecycle.
Standardisation enables easy API monetisation.

API business models

GSMA heralds the proliferation of APIs as “a paradigm shift in how the telecom industry will deliver services in the future.” Camara provides an API table featuring eight overarching API categories. The APIs in the table are either in development or already active.

However, these categories will undoubtedly be influenced by geography, technology, policies, and economies, among other factors. Every nation and region has unique characteristics, which means API innovation will be prolific.

Open Gateway API monetisation is just one of the means of generating revenue from APIs. There are lots of API business models, such as:

Businesses offering their products and services through APIs.
Businesses built entirely around a single API.
Existing APIs are marketed as products and services.
Network-as-a-Service API provisioning for developers, via Open Gateway.

However, it’s important to match the business model to an appropriate API charging model.

API monetisation charging models

Operators need to establish how they will get paid in a way that prevents aggregators from marginalising them.

Pay-Per-Use
Subscriptions
Quota-based
Freemium Tiered
Revenue Share

Aduna is a 50/50 revenue share partnership between Ericsson and 12 telcos. Aduna aggregates APIs, making them available to developers through a single portal. The project eliminates the obstacle of multiple bilateral API agreements, fast-tracking the path to API monetisation.

Initially, a revenue-sharing model may yield small revenues. However, as IoT expands and developing nations make technological advances, the scale of revenue generation could be very significant.

Conclusion

Businesses can capitalise on APIs in many areas, including cybersecurity, scaling, user experience, accessing data for analysis, and operational efficiency. Furthermore, by combining APIs with AI, operators can leverage network resources and existing APIs to a far greater extent.

Evidence is pointing to a lucrative API future, and businesses are making their moves now. CSPs need a clear approach to API monetisation, understand their API resources, define their strategy, and utilise appropriate technology.

‘As with 4G, 5G monetisation will come in time. Unfortunately, the concept of 5G speeds and the hype around its versatility have raised shareholder expectations. Combined with years of thinning margins, understandably, people are frustrated at having to wait for returns on 5G investments.’

All signs point towards API monetisation as a means of generating revenue. However, operators need to move early if they want to secure their share of revenue.

Douglas Bryce, Marketing Communications Specialist at Squire Technologies

To find out more about Squire Technologies’ Network Exposure Platform, visit www.squire-technologies.com/open-gateway/

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