In 2006, fewer than 400 public APIs were available globally. Today, there are around 15,000 APIs, with 40 new ones created every week. Salesforce already generates 50% of its revenues via APIs, eBay generates 60%, and Expedia 90%. Welcome to the new ‘API economy’.
An API, or Application Programming Interface, is what allows software programs to ‘talk’ to one another and reach a broader audience. APIs are what allow you to share a news article on LinkedIn or send your location on WhatsApp using your smartphone. APIs are also what allow a farmer in Senegal to check crop prices via SMS (MLouma) or a student in the Philippines to pay for their bus ride using their mobile airtime credit (Bustayo). Services like these are powered by the APIs of local mobile operators.
In emerging markets in particular, APIs are bridges between mobile operators and startups that launch mobile services. These bridges, if open to developers and easy to walk over, can benefit both parties, and the whole ecosystem. They may also have a positive socio-economic impact on the potential four billion unique mobile end users of these services in emerging markets.
Why USSD, SMS, billing, location, and mobile money APIs are so end users relevant in emerging markets
Research and feedback from startups and developers in our networks both clearly show that today, the most useful local operator APIs are messaging (SMS, USSD), billing (direct operator billing), mobile money, and location APIs. A Bongohive survey of 40 developers in Zambia in April 2016 confirmed that USSD and SMS were the most relevant APIs for more than 80% of them. This shows that while the window of opportunity for basic, mainly consumer-driven operator APIs is probably long closed in more developed regions, in emerging markets where 2G networks, feature phones, and cash payments are still dominant, this window is still open.
Although the numbers are rising fast, mobile broadband penetration in Africa is still well below 30%, smartphone adoption is just reaching 25%, and debit card penetration is only about 20%. In this context, and with ubiquitous mobile phones, channels like mobile messaging, operator billing, mobile money, or even cellular positioning, remain extremely relevant for emerging market startups to reach and charge their end users for mobile services.
What’s in it for startups?
In emerging markets, where mobile operators are the main enablers of the digital economy, operator APIs are a powerful channel for unlocking creativity and giving the startup ecosystem a boost. Every time an operator opens a new set of APIs, it creates a powerful cycle of innovation as startups can combine several APIs to create new services. For example, a startup can offer SMS-based localised content to its users depending on their city or area, and then charge them by deducting the amount from their mobile airtime.
Such a service would leverage three operator APIs simultaneously: SMS, location, and direct operator billing. Startups and developers across emerging markets are already building mobile services using operator APIs. We have compiled some use cases for the six most popular ones: SMS, USSD, location, operator billing, mobile money, and identity (Mobile Connect).
Calling for startup friendly operator APIs in emerging markets
In emerging markets, operator APIs can still play an enabling role to unlock the growth of startups. This is a window of opportunity for both operators and startups, but it may not last. In this context, we are calling mobile operators to OPEN their APIs, HARMONISE them, and COLLABORATE with one another in order to seize this opportunity. In the meantime, teams behind operator API programmes need to accelerate their OUTREACH efforts to educate and support the local startup community about operator APIs and engage with them more broadly.
In response to GSMA’s call to action and as a strong believer in open innovation, we are also glad to announce that Orange Middle East Africa (MEA) has already confirmed its commitment to further opening APIs and making them increasingly accessible to the digital ecosystem in the region (more here).
We are strong believers in the value of APIs and hope Orange will be joined by other key operators in emerging markets in order for the industry to realise the full value of APIs, while contributing to the growth of local and regional innovation ecosystems.
Read our full report: APIs: A bridge between mobile operators and startups in emerging markets
The GSMA Ecosystem Accelerator programme works to encourage mobile operators in emerging markets to further open their APIs to startups and developers, harmonise them at the group level, and collaborate.
Our programme also supports startups through an Innovation Fund which will be launched on the 26th of July and will provide startups with funding, mobile-focused mentoring, technical assistance, and the facilitation of relationships with mobile operators. For more information: http://www.gsma.com/ecosystemaccelerator or get in touch at [email protected]