Network operator revenues through SMS are under threat as increasing use of flash calling authentication is set to see revenues from OTP messages dwindle, warns a new study from Juniper Research.
Flash calling authentication leverages mobile voice networks to authenticate a user or transaction via an originating phone number. The last few digits of this phone number are then automatically used for authentication, rather than a user inputting a code manually that was delivered by SMS.
The new study, Flash Calling Authentication: Impact Analysis & Market Forecasts 2021-2026, predicts that flash calling has potential to threaten a significant part of operators’ SMS business messaging revenue. Many operators are still unable to identify flash calling traffic and cannot fully monetise it.
The report found that the number of calls used for flash authentication will near 130 billion globally by 2026; rising from less than 60 million in 2021.
This represents an astonishing growth of over 185,000% in the next 5 years.
Juniper Research recommends that operators quickly implement solutions that can identify this traffic. The move to flash calling is being driven by the low cost of termination, a convenient user experience, and a diminished threat of fraud.
Operators’ SMS business messaging under threat
The report predicts that authentication-based SMS revenue will reach $39 billion globally in 2022; representing 5% of total operator-billed revenue. As enterprises migrate their authentication traffic to voice, operators must protect SMS revenue by adopting voice firewalls that can detect unmonetised flash calling and attain flash calling revenue.
Report author Sam Barker comments: “Flash calling services have potential to disrupt SMS technology to an unprecedented degree. Operators need to support services over both SMS and flash calling, and a failure to do so will lead to reduced revenue from authentication.”
In terms of market adoption, OTT applications such as Imo have already announced their intentions to launch flash calling services. The report anticipates that flash calling will provide OTT applications with a significant platform to migrate SMS business messaging traffic to their services over operator-based services.