APIs: Telcos Can Boost Startups, SMEs Fortunes & Compete With OTTs- Alozie

Over the period of ten years the numbers of public APIs have grown globally from 400 to 15,000 with 40 new ones created every week, as sales force gets 50% of its revenues via APIs, while eBay and Expedia generates 60% and 90% respectively.

All around the world APIs have been known as the major driver of economic and business growth as it enables businesses to automate and easily make available their products and services to the rest of the world.

According to NCC as of July, 2016, there is 94% of Mobile phone penetration in Nigeria with 30% Smartphone penetration and 70% Feature phone penetration.

Most of the feature Phones are located in the rural communities who are the un-served in the areas of banking, internet availability, health etc

According to David Alozie, the convener, Disruptive Africa Expo, considering the Smartphone to feature phone ratio of 7:3 in Nigeria, it is justifiable to submit that while the OTTs might have been indirectly eating into revenues of Telco’s in Nigeria, they are still unable to influence and cash in on the 70% of Nigeria's GSM subscribers who use feature phones which is an untapped opportunity.

Alozie said that while Smartphone penetration is expected to double by 2018, Nigerian Telcos have the opportunity remain sustainable and increase their revenue by up to 50% if they find more ways to penetrate and engage the un-served communities.

According to GSMA's July 2016 report, the emerging market (which includes the internet-un-served 600 million feature phone users in the case of Nigeria) could be tapped into if Telcos build strong partnership with Startups who will fuel innovative products and use cases through the use of Telecom APIs to build innovative products.

Alozie who is also the promoter of CISME/Wiretooth Technologies said, “The GSMA reports also highlight that indigenous Telcos have better opportunities of leveraging the local Startups and developers community than Facebook, Google or Twilio. One of the key ways is to build worthwhile partnerships as they open up their APIs for Startups/SMEs.

“Examples of GSM operators leverage the use of APIs through their Developers Ecosystem include Telefonica (BlueVia programme), Deutsche Telekom (Developer Garden), AT&T and open up APIs for SMS, Cloud TV, IoT, Enhanced Push-to-Talk, Enhanced WebRTC.

“Presently, Telecom operators in about 10 African have opened up their APIs to Startups and are already building worthwhile partnership.

“Understanding how APIs can boost Telco revenue and the economy, the Disruptive Africa Developers Ecosystem (DADE) founded by David Alozie Organising Chair, Disruptive Africa Expo is building a Telecom Application Development Community and ecosystem in Nigeria to support Telecom Operators to take advantage of the unexplored opportunities in local Telecom APIs.

“This happens to be the only way Telecom operators can build Innovative products and services through startups which will be useful to both the Urban and the rural communities”.

According United Nations and International Finance Corporation reports SMEs make up 96% of Nigerian businesses. “This implies that the strategic empowerment and partnerships for Startup/SMEs will significantly boost the economy and generate new revenue streams for Telcos, Startups/SMEs and the Government.

“There are 2 revenue models that could be adopted by the Telecom in Nigeria as highlighted by:

Telecom API as an Enabler (B2B2C): This model involves the Telco offering the APIs for free to Startups and Developers, while the end users are charged directly by the Telcos for using the Service/Apps and split revenue with the Startups and Developers. The APIs that could fall into this category includes SMS/USSD and Operator Billing API

“Telecom API as a Product: in this case, the Startups are charged per API use as the Telco do not charge the subscribers. One API that could fall into this category is the Location Based API.

The dangers of our Telecom operators not acting timely could be economically disastrous with the following reasons:

“World is fast evolving through technologies as the world moves from a Luggage to a knowledge economy, and also as the world is gradually becoming more influenced by the digital economy and than the traditional economy.

“A world where a company could be the biggest Taxi Company without owning a Taxi, where you could have the biggest estate managing company without owning a single apartment; we are in a world where the world leading brands sell no physical products but makes money by social-matching peoples’ needs online and thereby creating a network effect.

“Presently, we are now in a world where people now generate their own telecom services and communicate with people without passing through a Telecom infrastructure. We are in a world where every expensive equipment used by Telcos have now been virtualized into software thereby taking away, hardware cost, maintenance cost, power cost etc.

We will soon come to a world where people will run big Telecom companies without owning any Telecommunication infrastructure”.

Making reference to Facebook and several other popular brands already building their open source Telecom solutions which might not require the conventional Telecom infrastructure, Alozie said that these suggest that for businesses to thrive in this Disruption age, they need to build innovative platforms-focused and social-kind of products that connects people and their needs/wants.

“Facebook understands this that is why they entered partnership with a Nigerian Telco to provide Free basic so that people can keep on connecting on their platform and get used to it.

“In the period of Android Smart-phone boom in Nigeria, people that don’t buy internet started buying internet because they want to use Facebook and Whatsapp.

“This connotes; no Facebook, no Whatsapp no social network and some people will never buy reasonable internet bundles from Telcos which is good as the Telcos are making money from Internet bundles than ever before, but then this could translate to dispensability for the Nigerian Telco's in the long run.

“There is a call to Nigerian Telecom operators need to focus on innovative social-platform products and the only way they can get the right workforce (considering the level of intellectual innovation requirement) to harness their inherent potentials in Nigeria/Africa is through Startup Partnership.

“DADE is playing its little role in building worthwhile community of people in startups and Telecom industries to harness and explore opportunities, which we believe could be a huge step in the right direction if all hands are on deck”, he concluded.