• Telcos have been trying to find the right API exposure model, and to become digital service providers, for years
• Now technology and strategy stars have aligned, Telefónica’s Juan Carlos Garcia told the recent DSP Leaders World Forum
• He believes that industry collaboration and the alignment of various initiatives has paved the way for an era of communications network API services
• The open nature of telco IT systems has helped to show the way, he noted

The telecom sector has been talking for years about digital services, open architectures, API-enabled business models and cloud-native processes, but there have been significant barriers to progress. Now, though, the digital service provider (DSP) technology and strategy stars have aligned and the era of network API services, along with new business models for progressive telcos, is upon us, according to Juan Carlos Garcia Lopez, SVP of technology innovation and ecosystem at Telefónica. 

Garcia was co-host of the recent Why data and APIs are key to implementing the vision of the digital services provider session at the DSP Leaders World Forum 2023 in Windsor, and set the scene for the debate with an opening address, during which he argued that the significant progress made in the digitalisation (and exposure) of telco IT systems, based on specifications developed by telco-led industry body the TM Forum, had laid the ground for the digitalisation of communications network capabilities via common APIs. 

But it’s been a long and bumpy road to get to this point, he noted: Telcos have been working for many years to become digital service providers (DSPs), and Telefónica, along with many other companies, previously had subsidiaries, many around 10 years ago, with the word ‘digital’ in their name. 

In the case of the giant Spanish telco, its Telefónica Digital division was launched in 2011, but disbanded in 2014 as part of a restructuring process. 

“So we have been trying to do this for a long time, but we were not successful – 10 years ago, there were some blocking factors. First, the technology was not ready. Our networks were still legacy networks, they were rigid, still not open [and] not offering service-based architectures. And they were not based on cloud, not having the flexibility to expose their capabilities. So technology was one of the [factors],” he explained.  

“The second is that the market was not ready. Customers had not gone through the digitisation process, most of them were still not using the cloud, [and were] not used to interacting with partners using programming interfaces.”

In addition, “the telco industry probably was not prepared at that time to take that step… in the way we collaborate. There were some things still missing, [including] collaboration with the wider industry, with customers, with potential partners, with technology providers – [this] is something that is absolutely required when you develop digital services. This is something that you can not do on your own, so you need to work very closely with customers, with the developer communities, and I think we failed at that time” to collaborate in the right way, added Garcia.  

“Nevertheless, things have happened in the past few years that have prepared the ground [for] the next step – to try once again… to launch API services. Now we are… trying again  [with] much higher confidence. And the reason for this is the work we have done in the past few years.”

In Telefónica’s case, and learning from its previous experience, it launched in 2017 “something we called the fourth platform – a data and exposure layer on top of the other three platforms – those three platforms were the network, the IT, and the services. [The fourth platform] was providing a kind of intelligence on top of them, collecting the data from these three platforms, optimising the way network, IT and services were working. And not only that but also exposing information and capabilities to the customers so that they could somehow better integrate with the telecom operators and use their capabilities,” said Garcia.

The Fourth Platform has since been renamed Kernel, and is at the heart of both Telefónica’s efforts to expose its network APIs and its contributions to the GSMA’s Open Gateway initiative, which was launched earlier this year – see Telcos court developers with universal network APIs.

Kernel is “ready to expose APIs. We have already used it to expose [our networks to] other data service providers in order to integrate their services on our platforms. I'm talking about our TV platform, our IoT [internet of things] platform – they are already amplified and our partners can get access to them through APIs,” noted the Telefónica executive.

 At the same time, there has been a concerted industry effort so that operators such as Telefónica are not developing their capabilities in isolation. 

“In 2019, operators at the GSMA started discussing, strategically, what was going on” in the telecom sector. “We saw… there was no growth in connectivity services, and we faced a  huge challenge in terms of technology development and the deployment of 5G.”

The mobile operators “started to think about how to monetise our 5G investments,” and that led to the formation of the operator platform group at the GSMA in February 2020. “Since then, “this group has been working to define the way operators are going to expose their capabilities and has gathered the participation of more than 45 operators worldwide and 30 technology partners. So, I would say, this is a very wide collaboration initiative. In the past five to 10 years, we have also seen quite a lot of progress in the digitalisation of the IT domain. We have been collaborating very actively with the TM Forum on the definition of the open data architecture and also on the open API group to define how the different models in the IT system interconnect with each other through APIs. This is a very good basis on top of which to take the next step, which is digitalising our networks. [We need to] modularise the network and make the network accessible for APIs” in the same way the IT systems are already, noted Garcia.    

“And there is another important trend: If you look at the last three years, during two of which we were locked down… there have been plenty of initiatives launched by the telco industry in bodies that are not traditional telco bodies” like the Linux Foundation, “where software and cloud technologies are developed.” 

Examples of such initiatives and projects launched in the past three years are Anuket, Nephio, Sylva, Camara, “all of them looking at how we can transform our telecommunication network into cloud-based networks… [to build] a digital service architecture. All of this makes us think we are now better prepared” to become digital service providers. 

That confidence led 25 operators to sign the open gateway agreement in February, during this year’s Mobile World Congress, “with the commitment to commercially launch API services this year. So we are now not just confident that we have the opportunity from a technical perspective to make” network API services a success, “but we also have a commercial opportunity that we want to make a reality.” 

And he stressed that while data management and API development strategies are key, there’s a lot of groundwork to be done on the supporting underlying platforms. “To develop and deploy these digital services, the data and API layer is… extremely relevant to be able to expose capabilities, but you also need to do a lot of work in the underlying network and IT systems to make it possible,” concluded Garcia. 

So are telcos well placed to become DSPs and capitalise on the network APIs opportunity? Garcia is not alone in believing so, as the number of operators that have signed up to the open gateway initiative shows, but not everyone is convinced: Check out the full DSP Leaders World Forum debate to find out more.

- Ray Le Maistre, Editorial Director, TelecomTV