TECHNICAL
(General Data Protection Regulation) in the UK, the costs associated with ensuring compliance will often mean these costs are passed to consumers through their services, including SMS. However, despite these regulations, SMS continues to experience high levels of messaging fraud, including spoofing, grey routes, phishing, unmonetised flash calling, messaging trashing, and more recently, AIT (Artificially Inflated Traffic). Furthermore, Juniper Research notes that a significant reason for this rise in price is due to more businesses opting to use instant messaging platforms and social media channels as an alternative to SMS. Therefore, as the use of SMS begins to plateau, operators will be forced to increase their pricing to compensate for a decline in revenue. However, to ensure the future of operator revenue, Juniper Research notes that operators will need to keep authentication traffic within the realm of telecommunications ecosystem. A failure to do so will lead to decreasing operator revenue in the long term. To do this, whilst brands and enterprises look to Open APIs to supply alternative resources for business messaging use cases, Juniper Research notes that operators
Figure 4: Relationship Models for GSMA Open Gateway
business messaging traffic owing to SMS networks that are plagued with fraud, such as AIT and message trashing. This can further increase and enterprises’ spend on SMS owing to undelivered messages or unnecessary spend on authenticating non-existent
As open APIs help third-party applications integrate with operator networks, this rise in SMS pricing will lead to a shift in the mobile messaging landscape in 2024 with businesses and developers exploring alternative communications channels via open APIs, such as Number Verify and SilentAuthentication. Additionally, third party channels, such as WhatsApp for Business will be an ever-growing threat to operators’ mobile messaging revenue. As developers begin to diversify their API offerings, through initiative such as the GSMA’s Open Gateway API, which was announced at MWC23, developers will continue to integrate various communication channels into their appliances for telecommunications use cases. Whilst the reasons for increases in SMS pricing vary by region and operator, Juniper Research notes that there are a number of reasons that will cause disruption in SMS business pricing over 2024: n Wholesale SMS Pricing: As SMS traffic continues to be impacted by alternative authentication channels, operators are experiencing slowing demand for wholesale SMS traffic. To maintain revenue growth, many operators are increasing prices; however this only serves to slow the demand for SMS traffic as enterprises explore other authentication channels such as flash calling and OTT messaging apps. n SMS Network Quality: Operators are unable to optimally price their SMS
user. Overall, this significantly diminishes the value of SMS for mobile authentication. n Regulations: As SMS must
be compliant with a number of government regulations, such as TCPA (Telephone Consumer Protection Act) in the US, and GDPR
Figure 5: Prevalent SMS Threats
MARCH 2024 Volume 46 No.1
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