The future of A2P SMS and the introduction of GSMA Open Gateway Network APIs

A2P SMS has been at the core of communications, user authentication and notifications towards end customers on behalf of brands such as hyperscalers, banks and governments for several years since it is the most ubiquitous communications channel available globally.

However, the market is experiencing a massive shift especially in international A2P messaging where the costs to deliver such messages has increased dramatically over the past few years.

In markets where the International Termination Rate (ITR) is low, A2P SMS is still prominent, including markets such as North America, Western and Eastern Europe, but in markets such as Africa and LATAM where the ITR has increased above 10 cents, this has had a damaging impact on the industry and market size.

According to MobileSquared the average ITR has increased from $0.034 in 2021, to $0.134 in 2025, an increase of ~300%! In some markets, the price has gone above $0.25 which is clearly not sustainable.

Even though markets that account for such high ITR only account for 5.64% of the total international traffic, these markets are having a devastating impact on the entire industry.

High ITR rates lead to the following issues:

1 Traffic levels drop when the price of an International A2P message go beyond 10 cents as brands look for cheaper alternatives to deliver messages to their end customers. Now that hyperscalers and brands have alternatives from SMS, they actively move away from SMS if the price becomes too high

2 Exclusivity deals are based on short term gains and MNOs should look at the longer term and realise that at the end of such contracts, their business will be destroyed as brands move to alternatives due to high prices

3 As the prices increase, so too does fraud such as Artificially Inflated Traffic(AIT) and use of grey routes

This problem is exasperated by MNOs who entertain such exclusivity agreements and price increases which results in the industry shooting itself in the foot.

All of these points have been highlighted in numerous reports from Mobile squared and other analysts and vendors.

The key for MNOs going forward is to take back control of their A2P SMS business operating in a healthy wholesale arrangement, with the use of a messaging firewall to protect brands, users and MNOs from fraud and smishing attacks to restore confidence in the channel. In addition, MNOs should introduce differentiated pricing for their A2P SMS traffic as not all SMS’s are the same. Whatsapp for Business already employs similar pricing and it makes sense to charge a premium for a time sensitive OTP versus a marketing message or a notification.

But there are also other opportunities and shifts in the market that can accelerate the decline of SMS, such as OTT players , RCS and Network based APIs.

Network Based API’s have been around for years, but there seems to be impetus around GSMA Open Gateway CAMARA based APIs and the main use case being silent authentication which could replace SMS OTP that account for a high percentage of A2P SMS traffic. If implemented correctly, silent network authentication offers a much better user experience for end customers and offers a new revenue stream for MNOs.

MNOs need to consider sensible pricing models for such capabilities and not go down the same route as A2P SMS and also consider multiple pricing models for network based APIs. Another key consideration is working together in markets to ensure at least full country coverage for enterprises to address their entire base of customers.

In recent weeks there have been several encouraging press releases from the likes of Aduna and GSMA regarding collaboration regarding network APIs and use cases such as SIM Swap, Silent Network Authentication and others. But MNOs need to think about how these capabilities can fit into existing ecosystems to deliver value to hyperscalers and enterprises, and provide things like developer sand boxes, which some are doing already, to enable as seamless an onboarding process as possible.

We would love to hear your views on the future of A2P SMS and also GSMA Open Gateway APIs.