Trust is at the heart of the issue. The rise of fraud, particularly artificial inflation of traffic (AIT) and abuse of OTP flows, has significantly undermined confidence in the SMS ecosystem. For many enterprises, it’s no longer just about reach but assurance. When messaging volumes are inflated through non-legitimate activity, businesses lose not only money but also faith in the integrity of the channel.

Pricing has also become a critical pressure point. In recent years, international SMS rates have spiked dramatically, in some cases rising by 40% to 500%, with domestic rates seeing increases of up to 100%. These changes have made SMS increasingly expensive compared to alternatives like WhatsApp for Business, email, push notifications, and even flash calling. Enterprises, especially those operating at scale, are finding better return on investment in other channels.

As MEF engages with stakeholders globally, it is focusing on helping the industry evolve in a coordinated way. That means working with mobile operators, messaging providers, and enterprise brands to support smarter pricing strategies, promote onboarding to new channels like RCS as a messaging-first strategy, and enable better authorisation mechanisms.”

But perhaps one of the most significant and under-acknowledged factors in the decline of SMS is user experience.

Simply put, there are now better tools available. For authentication, network APIs offer silent, seamless OTP verification built into the device itself, removing the need for user interaction and SMS entirely. For marketing and customer engagement, channels like Rich Business Messaging (RBM) provide a verified, richer, more interactive, and branded experience.

As consumers grow accustomed to these “app-like” interactions, traditional SMS feels increasingly outdated and less engaging.

At the same time, regional infrastructure realities must be acknowledged. In many developing markets, challenges around smartphone penetration and reliable internet connectivity persist, although both are on the rise.

In these regions, SMS continues to offer a near-universal reach, making it a critical channel for now. It’s likely that SMS will remain a long-term fallback technology wherever new mobile communication methods are still gaining ground. Not because it’s superior, but because it remains accessible.

The traffic and revenue data reflect these shifts. Globally, enterprise SMS use has declined particularly in high-volume use cases like OTPs and marketing. Some outliers remain: the US continues to see high SMS A2P usage thanks to structured campaign registration requirements, and in the UK, one major operator reported a 24% increase in on-net SMS since 2021, although recent signs point to brands beginning to pivot away.

Meanwhile, in Europe, Africa, and South America, hyper-scalers such as Google are moving significant traffic away from SMS.

Today, the most affected traffic types are OTPs migrating to network APIs or WhatsApp, marketing messages shifting to RBM, email, and OTT, and other notifications diversifying across a range of channels. Enterprises are increasingly aligning their communication strategies with user-preferred channels that optimise engagement, trust, and cost-efficiency.

The industry is not standing still. Many operators are onboarding new traffic, increasing rates to preserve margins, and cracking down on unauthorised activity including grey routes, AIT, voice OTP, and voice call abuse. There is also growing support for onboarding RCS and implementing better fraud detection and traffic classification systems. In markets like the US and UK, campaign registration requirements are adding structure and accountability to the ecosystem.

As MEF engages with stakeholders globally, it is focusing on helping the industry evolve in a coordinated way. That means working with mobile operators, messaging providers, and enterprise brands to support smarter pricing strategies, promote onboarding to new channels like RCS as a messaging-first strategy, and enable better authorisation mechanisms. It also involves spotlighting local regulatory and market dynamics, from Africa and Asia to LATAM and the Nordics, including topics like sender ID management, lawful interception, grey route activity, GT renting, and price caps.

MEF Advisor