The Rise of SMS Business Revenue and the Fall of SMS Traffic Fraud

August 2020

Telecoms & Connectivity

Scarlett Woodford

Principal Analyst

SMS traffic fraud is set to see a dramatic decrease by 75% over the forecast period, from 539 billion messages in 2020 to 138 billion in 2025. By contrast, operator business revenue traffic will reach $50 billion in 2025; increasing from $39.6 billion in 2020. This represents an overall growth of 26%; driven by the reduction in illegitimate traffic due to the implementation of SMS firewalls.

Due to the decrease in fraudulent traffic, operators will experience significant benefits as traffic delivered over legitimate channels increases, with operator revenue lost to illegitimate channels drastically reducing from $5.8 billion in 2020 to $1.2 billion in 2025.  

Whilst A2P is heavily dependent on SMS, this will begin to diminish over the next five years, as emerging messaging technologies, such as RCS (Rich Communication Suite), begin to accumulate a higher percentage of traffic. This will be a direct result of increasing support from both operators and handset manufacturers.

Juniper Research foresees that, despite the rise of rich media content, the majority of A2P traffic will continue to be transmitted over SMS, due to the format’s ubiquity and simplicity. As enterprises adopt an increasingly conversational approach to customer interactions, short code SMS messages will decrease in volume due to the associated costs, and the existence of more appropriate messaging channels. This will ultimately cause enterprises to rely more heavily on alternative messaging channels, such as Facebook Messenger, WhatsApp and Viber, to interact with customers on the most relevant platforms.

Within the retail sector, A2P SMS has traditionally been used to send tracking information and delivery updates to customers, as well as issuing coupons and discount codes to encourage increased consumer traffic. Juniper Research posits that, as enterprises continue to realise the benefits of holding interactive, two-way conversations with customers, more interactive forms of A2P messaging will gain popularity.

Juniper Research notes that RCS and OTT applications are not currently widely used for business messaging, but this will change as RCS deployments accelerate. As the number of users with RCS-enabled devices increases, brands will feel more confident in migrating traffic over from SMS. As rich media content becomes commonplace, brands will also introduce messaging over OTT applications, in order to reach users with iOS devices, who are not able to access content over RCS.