Over half of telecoms service providers expect SMS to experience an increase in fraud in 2025, with less than a third expecting SMS to become a cleaner channel in this period.

This is according to a new report from XConnect and Mobilesquared, which found that total SMS traffic is expected to fall by a quarter (25.9%) between 2024 and 2029, which can be attributed to the overall health of the SMS marketplace.

At the same time, the average cost to send an SMS internationally leapt by 85.2% between an aggregator and mobile operator are one of the main contributing factors for excessively driving up international termination rates (ITR).

“After the meteoric growth and global adoption of SMS over the last decade, the channel has been exposed to a set of dynamics that come with maturity: over-monetisation, price increases, interconnect fraud and artificially inflated traffic (AIT)”, said Tim Ward, at XConnect.

“The users of SMS have been responding to these challenges in many different ways. One of the key conclusions from the report is that there are precautions that can be taken by identifying the high-risk destinations and applying simple real-time checks to guarantee the safe passage of traffic. This becomes essential to restoring trust in SMS as the messaging market grows more complex.”

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The ‘good’ markets (NISQ growth below 500% and an international termination rate below $0.10) account for 84.2% of total A2P SMS traffic in 2024. By region, 67% of North America and 60% of West Europe are ‘good’ markets.

The ‘bad’ markets (NISQ growth in excess of 500% and an ITR over $0.10)accounted for 3.58% of total traffic.

Almost 80% of total NISQs in 2024 occurred in good markets, 13.5% in bad markets, and 6.94% in indifferent markets. This confirms the research data from XConnect customers that they are using NISQ to ensure safe passage of their SMS traffic.