Firewalls Key in Protecting $58 Billion Business SMS Market

Operators’ revenue from SMS business messaging will reach $58 billion by 2027, rising from $46 billion in 2023, according to Juniper Research. However, the report highlighted Diameter protocols as critical to protecting this 30% revenue growth. The Diameter protocol supports routing and analysis of traffic over 5G networks; becoming critical as the proportion of mobile subscribers on 5G networks reaches 45% by 2027.

The report estimates that over 1 trillion SMS business messages will be used for authentication purposes, including OTPs (One-time Passwords) and MFA (Multi-factor Authentication); a highly demanded use case, in which operators can charge premium prices for traffic termination. It identified third-party SMS firewall solutions as a key tool for identifying and monetizing this traffic.

Additionally, operators must implement SMS firewalls to ensure the cleanliness of networks as competition for authentication traffic arises from outside the telecommunications ecosystem. Emerging frameworks including device-based biometric authentication and OTT-based business messaging, will place pressure on operators to ensure that SMS business messaging remains the de facto channel for authentication over the next four years.

“SMS firewalls are the key solution to allow operators to protect their networks against fraudulent SMS traffic and the emergence of these cost-effective alternatives for authentication. Not only has the rise of 5G networks necessitated new technologies such as Diameter protocols, but it has also driven the complexity of messaging-based fraud,“ commented report author Elisha Sudlow-Poole.

The research identified the deployment of SMS firewalls as a prerequisite to providing a security product that effectively identifies, monitors, filters, and blocks fraudulent traffic, such as grey route and SMS spoofing fraud. A failure to protect subscribers from fraudulent SMS activity will damage consumer trust in operator-led messaging, ultimately driving enterprises towards the aforementioned alternative channels and reducing operator revenue from SMS business messaging.