Over The Top (OTT) rivals, such as Google, Skype and Netflix, are cutting into telecom operators' revenues and margins. Customers are happy to pay for content from these players but little of this revenue is reaching telcos, yet they bear the cost of delivery as broadband data services clog their networks.
One way for telcos to monetise this traffic is to drive new information-brokered revenue models with partners through open analytic website services APIs.
Antoine Rizk, VP for Go-To-Market Programs at Axway, spoke to us about how OTT services can utilise API technology to compete with their OTT rivals.
TechRadar Pro: How much of a threat is the OTT market to telecoms operators?
Antoine Rizk: As the online entertainment and communications market continues to sky rocket, telecoms companies are facing a serious challenge.
Whilst the majority of consumers are happy to pay for the latest smart devices, popular mobile apps and monthly subscriptions to online entertainment providers, unfortunately, much of this revenue stream rarely reaches the telcos who are delivering the bandwidth supporting these services.
To make matters worse, many of the OTT services are eating up bandwidth that is driving force behind the running of the telco market.
Because of such factors, many telecoms providers now face a significant threat from their OTT competitors.
TRP: What has been the role of APIs in powering the mobile app revolution?
AR: Last year the number of public listed APIs was 10,000 and rapidly growing in part because of the opportunities they bring the mobile app market.
Put simply, APIs or Application Programming Interfaces as they are in full, provide applications with the language to talk to each other. By sharing some of their functionality with the outside world, APIs can spawn a wealth of new apps that are built on the same features.
This makes it quicker for developers to develop new apps as they don't need to do it from scratch and it benefits the brand as it increases their customer base.
APIs also enable a seamless user experience across multiple devices and platforms; think about how often you sign into various online accounts with your Facebook or Twitter profile.
Companies are able to launch in new markets and reach more customers, simply by sharing their API. This has led to a massive increase in mobile app development and the level of control that API management brings has meant more and more companies are open to sharing their APIs.
TRP: What business opportunities are there for telcos and how can they use APIs to give them a competitive edge?
AR: Today, nearly 24% of web applications and 15% of mobile applications utilise APIs. So there is clearly an untapped market for telco organisations that are looking to discover the growth opportunities offered by APIs. To reap these opportunities they will firstly need to choose the correct API business model that is right for them.
Firstly, the telco can open their APIs to partner organisations to better provision services to customers. For example, a mobile operator could open their API to a retailer to speed up the on boarding process for new customers. Secondly, telcos can open APIs within the organisation to create a hacking culture that stimulates internal innovation.
This will promote a fast and easy resource for sharing within the company. Alternatively, organisations can open the API to the broader developer community, reaching a vast pool of talent, creativity and untapped revenue which was previously beyond the reach of your network.
TRP: What kind of growth are we going to see of the API Economy over the coming years?
AR: In conjunction with the rise of mobile devices, such as the tablet and the smartphone, the API market is expected to grow at an astonishing rate.
Mind Commerce has predicted that by 2018, 68% of all web and mobile applications will utilise APIs, generating global revenue worth $157 billion for the Telecom Network API market.
In order for telco's to remain at the front of the game, telco's will need to create and nurture a developer community to drive API adoption.
TRP: How can telcos maintain security when sharing their APIs?
AR: It's essential that the security of transmissions, the authentication of devices and users, as well as the traceability of transactions, are taken into account when securing and sharing APIs. In order to do so, organisations will need to tighten the API net, to prevent hackers slipping through and data slipping out.
When organisations open their APIs, they will require a centralised way of locating and managing the data; so rather than monitoring each stage of the journey, they will need the capacity to manage the complete lifecycle of information.
API gateways provide enterprises with a platform for deploying and managing APIs, internally and across the firewall, regardless of protocol or authentication mechanism.
In addition, the gateway will give the organisation a clear vision of how developers are using their code, internally and externally, allowing them to fix issues quickly and prevent bottlenecks from disrupting the data transfer process.
TRP: Can the same technology be applied to cloud services and the internet of things?
AR: To put it simply…yes! API technology is driving and empowering the IoT revolution linking all our devices in a new internet ecosystem, from the connected car, to controlling our heating via our mobiles to monitoring our sports performance on fitness bands.
It's inevitable that over time, an increasing number of businesses will open and share their APIs; mainly to remain competitive and keep up with the changing market. However, with more sensitive information and business critical interactions being handled, security, management and access control have become must-have capabilities.
API gateways standardise the API development and delivery capabilities that are needed to control existing applications. API gateways also provide new business services via cloud, mobile and partner channels.
TRP: What are the security risks when connecting multiple devices?
AR: Securing, locating and managing the flow of this information has proved increasingly challenging. When you consider confidential information is for a short period of time, exposed in cyberspace, the risks associated with hacking, data loss or data corruption multiply quite considerably.
Not only does human error play a factor, particularly when it comes to data loss, but hackers will also know how to find the weak spot between two different devices. Many will exploit this knowledge in order to get their hands on valuable information or steal valuable belongings; like collecting customers' credit card details or even controlling a car.
Just recently the Telsa connected car for example, was in the media spotlight when its iOS interface was exposed as being vulnerable to hackers. Because the car was effectively protected by only a single password, a potential hacker could easily locate the car and even open it from a remote location.
The consequences of incidences like this can wreak havoc on a business– from long term brand damage to hefty monetary fines.
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