SMS authentication traffic has provided mobile operators with a fresh opportunity to monetise SMS services. But the increase in fraudulent activity and artificially inflated traffic (AIT) alongside rapidly rising business pricing could dampen enterprises enthusiasm.
For the last five years, SMS authentication traffic has risen at an average annual growth rate of 10%.
Following the Messaging & SMS World event back in June, Capacity documented the increasing threat that AIT posed to enterprises, operators and ecosystem partners.
The key takeaway there was that restoring and maintaining trust in SMS is essential for operators to continue their drive to monetise the channel.
That trust appears to be dwindling.
Juniper Research said that AIT is leading enterprises to explore alternative authentication technologies, such as one-time passwords over OTT messaging apps and flash calling.
The latter would spell bad news for mobile operators. A flash call is a near-instant dropped call that is automatically placed to a mobile number. As the call is not answered there is no termination fee, and the call is recorded as a missed call in the call log.
Juniper Research also predicted that over over 50% of SMS traffic will be attributable to authentication use cases in 2024.
To combat slowing SMS traffic growth, Juniper Research recommended that operators must promote authentication APIs such as Number Verify and SilentAuth, to keep demand for authentication services within operator-controlled environments.
“If operators are unable to reduce prices and fraud on their messaging networks, they risk losing vital authentication traffic and revenue to other channels,” Juniper Research said.
In order to support API rollouts, it was suggested that the GSMA Open Gateway should be used.
The gateway, which was launched this year, will enable operators to develop and deploy API‑based authentication solutions and eliminate the need for user authentication.
Silently authenticating at the SIM-level instead will provide a frictionless experience for mobile users whilst retaining the use of telecoms networks.
Flash calls require little involvement from the mobile user, so updating SMS authentication to keep pace is vital if it is to remain the authentication solution of choice.
