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Network APIs face a commercial reality check: operators cannot justify heavy investment on speculative hyperscaler demand. Smaller, faster wins such as Branded Calling could generate revenue sooner, build confidence, and fund more ambitious programmable-network services – writes Proximus Global.
The telecommunications industry seems to love a grand narrative. With the dawn of the programmable network, a new one is on the rise. The GSMA and aggressive competitors have spent recent times pushing the idea that demand for network APIs is everywhere, and MNOs simply need to build the supply.
While it’s an aspirational party line, it ignores substantial context. The brutal reality of telco economics means that the heavy upfront costs required to participate are a major barrier for many.
Despite widespread interest, in practice, the highly anticipated network API hype cycle has not yet translated into noticeable commercial revenue across the industry. The current industry narrative alludes to network APIs as a one-size-fits-all, global product that is supposed to scale overnight. But these opportunities demand cross-border coordination, and total coverage before delivering any meaningful ROI.
Crucially, it also requires significant upfront CapEx investment to upgrade legacy systems, which is not always readily available.
Recognising this is important. For the network API market to scale, we should not be expecting operators to flip a switch from traditional channels to network APIs. We need to focus on small, fast, asset-light wins that justify investment from day one.
The telco dilemma
The hyperscalers and tech giants are driving the demand for network APIs. With huge amounts of digital traffic, they will be the clear beneficiaries of scaling programmable network signals. It will allow them to integrate transformational security and performance controls, such as SIM-swap detection and dynamic latency management, directly into their cloud platforms at scale.
But their entry requirements are hard to reach. Before they will seriously consider a deployment, hyperscalers typically expect a minimum of 75% coverage within a country. On top of that, in order to proceed, they demand compliance with the latest, top-of-the-range tech standards.
For MNOs, this is not simply a case of developers tweaking lines of code. And unlike the cash-rich era of the 2000s, operators are now operating with small margins. MNOs cannot just speculatively pour CapEx into unproven, shifting standards on the hope of future hyperscaler volume.
Local operators need immediate proof of commercial viability. That aforementioned ‘day one justification’ for their capital is needed. They are increasingly demanding that aggregators bring the hyperscalers to the table to justify API deployment and prove the investment is not a net minus.
This brings a telco catch-22 into the equation. As an example, hyperscalers want network APIs to replace One-Time Password (OTP) SMS due to cost and security concerns. The tech giants promise higher volumes in the future if APIs are cheaper. But OTP is a high-margin revenue stream for telcos. They are rightfully concerned about the prospect of losing their stable, proven earnings while simultaneously burning capital on network API infrastructure, given that it could also lower the price of authentication.
It’s a delicate situation for operators. But the reality is that SMS OTP is a melting ice cube. Many of the authentication methods that once generated SMS traffic have already shifted to alternative methods. The choice for telcos then, isn’t whether or not this change happens or not, it’s whether they play a role in shaping what comes next.
By bringing APIs into their mix, operators have the chance to remain part of the authentication value chain, offsetting losses and opening up a new portfolio of services that could drive long-term growth.
Regional fragmentation
But shaping the future does require time, effort and most importantly, cooperation. The idea of a globally flawless, standardised API ecosystem fails to account for the reality of regional fragmentation. There is no universal global API standard; regulations dictate functionality.
Even if operators standardise their interface and develop in accordance with CAMARA, local regulatory shifts inevitably define the boundaries of what is achievable.
Take scam signals, for example. It’s particularly relevant in markets where banks and telcos want to work together to tackle fraud, but regulatory requirements can make it difficult to deploy in its most effective form. In Belgium, regulations currently prevent the API from being used as intended. Rather than abandoning the use case, however, the telcos and other key players are working together to find a way to develop the API while remaining compliant. This is a key challenge and lesson for network APIs: successful use cases cannot simply be copied from one market to another.
To put it simply, regional compliance can hamper global standardisation. There are countless examples of this playing out. While the GSMA and the industry as a whole push CAMARA interfaces, countries like Belgium have made it clear that those standards are not always enough.
Belgian regulators do not allow certain identity APIs to provide a binary “yes or no” answer. Instead, operators must build additional software layers to transform raw network data into compliance risk scores. Suddenly, you are out of the global standard, and the upfront cost of deployment multiplies. Meanwhile, markets with different regulatory approaches, like the USA, move at a different pace, creating discrepancy with how fast global operators can bring APIs to market.
Elsewhere, the UAE has banned SMS and email OTPs for financial services, requiring all licensed financial institutions to phase them out for authenticating online payments. This has effectively pushed banks to adopt alternative network verification signals almost overnight. This shows how governments, instead of being speed bumps, can act as enablers for Network API exposure and monetization, giving telcos an additional push to develop and scale APIs, like Number Verification, as a replacement for SMS OTP, while capturing significant revenue opportunity in the market.
It is therefore strikingly clear that the API market is not moving in a synchronised direction worldwide. Instead, it is a puzzle where every piece is shaped by local regulations and disparities between individual operator readiness within each market.
Kickstarting the market
With massive hyperscaler volume too expensive and risky to chase from the start, we need to rethink how we kickstart the market. We should do so by focusing on use cases that do not require heavy capital lifting and offer immediate commercial upsides.
The industry is spending too much time on academic discussions about complex tech upgrades like Quality on Demand (QoD), or advanced 5G Standalone network slicing. While these may be impactful eventually, right now they require huge upfront investments in the core network, but widespread commercial use cases are still years away.
Instead, we should turn our attention to asset-light solutions like Branded Calling.
Enterprises view fraud-prevention and identity APIs as an unloved operational expense (OPEX) to be minimised. Conversations often go something like, “I pay 1X today to prevent fraud; I want to pay 0.5X tomorrow.” The focus is always on reducing fraud budgets, meaning enterprises are always trying to squeeze the price down.
The commercial conversations around Branded Calling are the opposite. They are around revenue generation.
Branded Calling lets businesses inject verified identity, logos, and call purposes directly into the user’s device. In doing so, it allows consumers to confidently answer a verified delivery call. And the best part? It integrates straight into network infrastructure that is already available, such as Contact Center as a Service (CCaaS) and Unified Communications (UCaaS) platforms, giving telcos an easy upsell into proven businesses with existing customer demand.
With the enterprise customers already in place, commercial value is immediate.
Suddenly, the API conversation is no longer about precarious infrastructure gambles; it is about revenue-generating services.
The snowball effect
Given today’s margin pressures, expensive global API standardisation is currently a difficult proposition for many operators.
Deploying low-upfront-investment use cases like Branded Calling is the way forward. It will allow for immediate commercial traction in key sectors like banking, fintech, and enterprise comms.
These quick, localised wins will be the making of the network API market, and we will see a snowball effect in time.
With quick revenue generation and reinvestment, we can gradually climb the ladder, hitting more and more network API achievements along the way.
A sustainable, operator-friendly path is the only one to take if we are to build the sophisticated, next-generation network capabilities of the future.
Ievgen Martsin is VP for Product Technologies, Network API, and Future Proof CX at Proximus Global. He is an experienced product and transformation leader with more than 18 years in telecom and technology, specialising in AI transformation, network APIs, digital adoption, customer experience, and enterprise-wide innovation. He has led global post-merger integrations, launched the Konera network API platform and an AI Center of Excellence, and works closely with hyperscalers including AWS, Google Cloud and Microsoft Azure on next-generation digital experiences.
