Nokia and Infobip announced a strategic partnership to combine their developer alliances and API capabilities. The goal is to create new apps that leverage networking capabilities. Network operators have seen their power and influence diminish with CIOs as they turn to over-the-top (OTT) providers such as Microsoft Teams, Cisco Webex, and Zoom. The partnership shares many similarities with Ericsson’s 2021 acquisition of Vonage.
Communications platform as a service (CPaaS) has helped developers tap into communications services for decades. Initially, it was quite specialized, but potential use cases keep expanding. Today, most communication providers offer developers a selection of communication APIs. Ericsson realized that CPaaS just might elevate the importance of networks.
Ericsson acquired Vonage for approximately USD 6.2 billion to add CPaaS capabilities and a suite of business applications, including UCaaS and CCaaS. The new portfolio works as Ericsson recently signed agreements with Verizon and AT&T. Verizon selected Ericsson’s Vonage API platform to broadly expose its network to developers. The CEO of AT&T explained replacing Nokia with Ericsson would maximize and modernize its network.
Nokia's Network as Code platform offers APIs that unlock wireless networks, including quality of service (QoS) on demand, device location precision, and network slicing. Network as Code has attracted several partners, including BT, Dish, NOS Portugal, and Telia. However, Network as Code lacks APIs that enable real-time communications services, including voice, video, chat apps, SMS, and network APIs into applications.
That’s where Infobip comes in. It also has an ecosystem of providers that includes Vivo, Claro, TIM Brazil, Vodafone, Orange, Telefónica, and other operators. Nokia turning to CPaaS, as Ericsson did, signifies a trend, so Huawei will probably be next.
As the Buffalo Springfield song, “For What It's Worth,” says “” Ericsson and Nokia hope that a rich ecosystem of developers could create apps that control and leverage network capabilities. That could benefit enterprises, end users, network providers, and wireless infrastructure vendors.
If that goes well, wireless services will continue expanding in the enterprise. Several UCaaS providers have natively integrated with wireless operators. Microsoft has named numerous partners for Teams Phone Mobile around the world. Cisco, DSTNY, Enreach, and RingCentral have also integrated their UCaaS into wireless networks. The transition from hard phones to softphones continues to smartphones.
Wireless is also redefining the contact center. Contact centers were built around the assumption that customers call from analog PSTN lines. Today, it’s more likely that the customer has a smartphone. This changes the available channels, enables contextual interactions via apps, and offers new ways to authenticate customers.
Another notable trend here is that Europe is reclaiming communications. The rise of OTT apps geographically benefited American communication companies. The EU has been asserting its control via regulations and policies that have caused Microsoft to stop bundling Teams. Data sovereignty requirements and the Digital Markets Act are in early innings (as in cricket, not baseball).
Europe has been ahead of the US regarding wireless technologies and adoption. Ericsson (and now Vonage), Nokia, and Infobip are all European providers. The largest mobile event of the year takes place in Europe.
I see the merit of the Ericsson-Vonage deal, but I struggle to make sense of Nokia-Infobip. Nokia clearly will benefit from real-time APIs in its Network as Code platform, but it didn’t quite do that. Instead, it aligned with a CPaaS provider that its ecosystem already had access to.
Does this mean Nokia will not build its own communications APIs, or is Infobip a stopgap while Nokia develops them? Nokia described the partnership as a “one-stop shop” for its partners. Is Nokia becoming a reseller of Infobip? What is the benefit to Nokia’s partners for using Infobip compared to other CPaaS providers such as Synch or Twilio? Has either Nokia or Infobip committed to an exclusive relationship with the other?
Perhaps the better question is why Nokia didn’t acquire Infobip. In terms of revenue, Nokia is about 20 times larger than Infobip. Nokia has had some challenging quarters, but it’s still profitable and can swallow a CPaaS provider. Choosing an alliance over an acquisition signals a tepid commitment. That makes it a big ask of its developers to integrate these APIs.
Dave Michels is a contributing editor and analyst at TalkingPointz.
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