MTN, Glo, 9Mobile, Airtel in on $27bn SMS authentication revenues

BY MADUABUCHI EFEGADI

Mobile operators worldwide are in for a big haul this year as it is estimated that they are in line for to reap $27 billion from the termination of SMS messages related to multi-factor authentication, which is a five percent increase from the $25 billion generated in 2021, according to a new study by Juniper Research.

According to Telecomsnetwork.com, which measures the number of mobile telecoms operators worldwide, there are 816 mobile network operators globally.

The new research predicts that this five percent growth will be driven by increased pressure on digital service providers to offer highly secure authentication that reduces risk of data breaches and protects user identity.

Multi-factor authentication combines two or more credentials to verify a user or transaction. This includes sending an SMS that contains a one‑time password or code to a user’s unique phone number.

The new research, titled: Mobile authentication: Future strategies & market forecasts 2022–2027, urged operators to capitalise on the growth in demand for multi-factor authentication SMS traffic, by leveraging firewalls to monitor and identify SMS traffic specifically used for multi-factor authentication.

In turn, operators will then be able to charge a premium on this traffic and further increase business messaging revenue.

The research predicts there will be over 1.7 trillion multi-factor authentication messages delivered globally in 2022, representing 60 percent of total SMS business messaging traffic.

Meanwhile, mobile operators would be required to develop machine learning algorithms that automate the monitoring of the vast amount of traffic to efficiently identify messages that can be charged at a premium.

Nigeria and Africa, with rapid developments in its mobile communications markets in recent years, stand a chance to reap big in the incoming global boom.

For example, exclusive handsets designed for the market, and the increasing popularity of built-in services such as mobile money have led to increased adoption of mobile technology in the continent.

As of Q4 of 2021, mobile phones shipped in Africa was 48.6 million. To date, MTN, Africa’s largest telecom company by subscriber base, has group subscribers of 272.4 million.

In Nigeria, by far with the largest mobile penetration, mobile cellular subscriptions in 2020 was 204 million, against South Africa’s 95.96 million and Egypt’s 95.36 million.

Keith Breed, the research co-author, remarked that: “automating traffic detection is crucial for operators as we expect multi-factor authentication traffic to grow to 2.1 billion messages by 2027. SMEs have typically not invested in messaging for security in the past. However, rising pressure to implement greater security for users will drive adoption amongst SMEs over the next 5 years, and increase global traffic.”

To manage this increase in demand for multi-factor authentication SMS messages, the report urges mobile operators to partner with Communications Platform-as-a-Service (CPaaS) platforms. The platforms offer the necessary user interface to SMEs to manage authentication processes and subsequent traffic from which operators will attain additional SMS business messaging revenue.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.