Ericsson bets on new software to spur 5G revenue growth

Sweden’s Ericsson (BS:ERICAs) said on Wednesday it has partnered with Deutsche Telekom (ETR:DTEGn) to offer software tools for developers and business customers that will allow telecom operators to get more revenue.

Known as network application programming interface (API), the software will use the Vonage platform – a company Ericsson bought for $6.2 billion in 2022 – to help developers create new use cases based on a mobile network.

Network (LON:NETW) APIs can be used by businesses for things such as boosting 5G speed when needed to locate a customer’s phone in a store when a transaction is taking place to prevent fraud.

“We view the API business as a standalone business in itself, so we need to make that profitable by itself and the way the revenue split works is attractive for us and will be attractive for Deutsche Telekom,” Ericsson Chief Executive Borje Ekholm said in an interview.

Telecom research firm STL Partners predicts that revenue from mobile network APIs will grow to over $20 billion by 2028.

More than 140 companies are working under an open source project called CAMARA to define, develop and test network APIs.

After investing hundreds of billions of dollars on 5G infrastructure, telecom operators have been trying to get returns from selling faster connections to businesses to automating factories, with varying success.

“They (operators) want to get more revenue, they will be able to sell features, whether it’s speed, latency, location authentication, they are going to sell a lot of different things coming out of the network,” Ekholm said.

“That gives a new source of revenue they haven’t had for a long time.”