Telcos to use AI to fight SMS fraud and drive A2P messaging revenue

03 Apr 2019

Juniper Research is forecasting that total operator revenues from A2P (Application-to-Person) messaging services will reach $62 billion by 2023, up from $43 billion in 2019. This represents a growth of 42% over the next 4 years.

The research firm also claimed that revenue growth will be driven by operator efforts in mitigating messaging fraud over grey routes, alongside the emergence of rich-media messaging technologies including RCS (Rich Communications Suite).

The Juniper research, A2P Messaging: SMS, RCS & OTT Business Messaging 2019-2023, also found that increased investment in SMS firewalls and AI (Artificial Intelligence) will drive down operator loss due to grey route SMS messages to $4 billion by 2023. This represents a fall from $10 billion in 2019, further contributing to operators’ messaging revenue growth over the next four years.

Grey route SMS includes A2P messages disguised as P2P (Peer-to-Peer) traffic to exploit the lower costs compared to directly connected A2P SMS. Juniper estimates that 24% of A2P SMS messages will be delivered via grey routes in 2019, however efforts in improving SMS firewall capabilities will drive this down to below 10% by 2023.

Meanwhile, RCS business messaging will account for under 10% of operators’ A2P messaging revenue by 2023. However, the research claimed that RCS business users will continue to use SMS for simple notifications, such as OTPs (One Time Passwords) owing to the low cost and simplicity. The research identified the integration of mobile payment capabilities directly into the RCS client to provide a differentiation point to SMS and increase RCS traffic.

Research author Sam Barker added “RCS will provide operators with additional revenue opportunities beyond simple message termination. Operators must explore the advertising ecosystem and mobile payments over RCS to exploit their substantial subscriber bases to generate fresh revenue streams.”

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