Why is the number of SMS increasing again? – An overview

It’s official: In 2021 more SMS were sent than in the previous year – what are the reasons?

It came as a surprise to many– the 2021 Annual Report of the Bundesnetzagentur (German Federal Network Agency) shows: in 2021, the total number of SMS sent in Germany increased again for the first time since 2012. In 2020, a total of around 7 billion SMS were sent, in 2021 that number was 7.8 billion – i.e. 0.8 billion more than in the previous year.

Last year, we already reported on the sharp rise in SMS sent in companies. Now the trend can be seen in overall SMS sending as well.

The obvious question is: Why is the number of SMS increasing again? And: will SMS sending continue to grow? Let’s take a closer look at the possible reasons.

Why is the number of SMS increasing? The official assumption

In 2021, the SMS traffic increased by 800 million SMS, compared to the previous year. The Federal Network Agency itself says:

The reason for the increasing SMS use could be, among other things, the so-called two-factor authentication, with which consumers can identify themselves in addition to the normal password, for example, with payment services.

Source: Federal Network Agency press release, 2022, translated by us

There is no question about it – the sending of 2FA messages and OTPs is certainly playing a key role in the increase. However, as the Agency also says, it is not the sole reason for the increase. We take a look at other possible reasons for the increased SMS sending.

Please note

We try to make assumptions about how many SMS messages were sent in which areas in 2021 using known data.
However, as there are no reliable numbers on various aspects – for example, the proportion of SMS messages in two-factor authentication – the numbers in our examples are, in part, based on estimates.

We can therefore give no guarantee that the figures are accurate. Nevertheless, they do provide an insight into the scale on which SMS is still being sent.

How important are COVID test SMS in this increase?

As an SMS gateway provider, if someone had asked us “Hey, why is SMS traffic increasing?” our first guess would not necessarily have been the growing need for 2FA SMS (although this is very real, more on that later).
Instead, we see a different purpose for which SMS has been increasingly used over the past two years in our own SMS traffic: Sending test results of COVID tests.

Even with low test volumes, the amount of SMS sent with test results is large enough to account for at least some of the increase.

Let’s look at some numbers.

Calculation example 1

In April 2021, there were more than 15,000 test sites in Germany (source: Ärzte Zeitung online).

We do not have exact information on how many test sites actually send SMS as notifications, so we have to estimate. We consider our estimates to be very conservative at this point – probably at least some of the numbers are higher than calculated.

Let’s assume that ten percent of test sites send text messages to tested individuals and that each site tests twenty individuals per day. In this case, they would send 30,0000 text messages a day. Even if we assume that testing would only take place on weekdays (at least 303), that would be 9,090,000 SMS in 2021.

Calculation example 2

According to the German National Association of Statutory Health Insurance Physicians, 211,858,798 test kits were billed in Germany in the period from July to December 2021. Let us therefore assume that 423,717,596 tests were billed in the whole of 2021.

If, again, ten percent of those tested receive a text message, approximately 42,371,759 text messages with test results were sent in 2021.

Even if an SMS were sent in only five percent of cases, 21,635,879 SMS would still be sent that were not sent in this way in previous years.

Calculation example 3

In July 2021, we published a case study of a Corona test center that sent test results via SMS.

In this example, six test stations sent an average of 2489 SMS per day, or about 414 SMS per test station per day. Let’s assume 200 messages per day in case other test stations had a lower test volume or sent exclusively the test result via SMS and not – as in the example – also a confirmation of the test date. We also take 15,000 test stations, as in calculation example 1.

With 303 working days in 2021, we can assume in this case that at least 90,900,000 SMS were sent in total for ten percent of the test stations.

Of course, these sample calculations may raise some questions, especially where the figures are quite far apart:

  • For example, are test stations more likely to be used if they offer sending test results via SMS and therefore have a higher test volume?
  • How realistic is the ten percent figure we used?
  • How many people were actually tested per day and station on average?
  • How many test stations were there on average in 2021? In January, there were probably considerably fewer than 15,000; by the end of the year, perhaps more
  • In how many cases was more than one SMS sent per person, e.g. one result and one appointment reminder?

Nonetheless: the examples show that it is not unlikely that Corona test SMS should also be taken into account when we ask ourselves “Why is the number of SMS increasing?”

Summary:

Depending on the calculation, we estimate that roughly between 9,090,000 and 90,900,000 SMS were sent as test notifications in 2021. The wide range is due to the fact that we calculated various scenarios on the basis of different data.

However, we can say: Based on the volume we were able to observe on our platform alone, it is extremely unlikely that only 9 million test SMS messages were sent. It is more likely that the actual number is even higher than the result from calculation example 3.

Appointment reminders and other messages to patients

In many medical practices, the need for effective communication has also increased. Appointment reminders have become even more important because people who get ill may forget to cancel all appointments. Feedback on appointment schedules can also be sent via SMS. Many medical offices like to send SMS because not only are they easy to integrate into practice software, but they also reach almost all patients equally effectively and don’t get lost in the spam folder by mistake.

Let’s assume that only 5% of all medical practices in Germany have introduced SMS appointment reminders in 2021 (we rely on data from 2019 on the number of medical practices in Germany, because we have found only contradictory data on 2021). In 2019, according to the Federal Statistical Office, there were 64,754 medical practices in Germany.

5% in this case is just under 3238 practices. Again, let’s calculate very conservatively and assume a practice that treats only five patients a day, i.e. sends only 5 appointment reminders a day via SMS, assuming 303 working days a year.
In this case, 4,905,570 additional SMS would be sent.
In the same example with ten patients, there are already 9,811,140 additional SMS. In some cases, however, patients receive not just one reminder, but several. In addition, the number of medical practices is likely to have increased in 2020 and 2021.

In short: presumably, the number of SMS sent is higher than in our example.

You get the idea: The growth in appointment reminders via SMS may be a small factor if we want to answer the question “Why is SMS sending increasing?”, but it still contributes a part.

Why is the number of SMS increasing?

Summary:

We assume that at least 4,905,570 more SMS were sent as appointment reminders in medical practices in 2021 than in the previous year. With a patient number of ten per day, this figure would already be 9,811,140 additional SMS if only one SMS is sent per patient and appointment.

More online shopping

Is the growth of online retailing also contributing to more SMS being sent in Germany? Many companies are deciding to offer their customers the option of receiving information on order and shipping status via SMS. In some cases, transport companies themselves also send SMS to customers. SMS is also used in some cases for internal notifications, such as when stock levels are low.

During the pandemic, sales via the Internet increased more than expected in 2020 and 2021 (source: Institut der deutschen Wirtschaft), so it can be assumed that the number of orders also increased. SMS play a role both in the authentication of new accounts and in various ordering processes – so there will also be an increase in the number of SMS sent here.

Unfortunately, it is difficult to calculate the total number of SMS – we could not find any reliable data on the number of orders or the SMS usage in the industry. Nevertheless, we can say that our service is still being used diligently in eCommerce.

Summary:

We could not calculate a specific number, because there was such unreliable data. eCommerce is likely playing a role in the increase in SMS dispatch, but it is difficult to estimate how large the impacts really is.

The uninvited guest: spam

Unfortunately, there is one more factor to consider when answering the question “Why is SMS sending on the rise?”: spam SMS.

According to the news site Heise online, Deutsche Telekom reported that in 2021 “[…] close to 100 million smishing SMS were sent […]” only from infected devices and only in the Telekom network. (Source: Heise online). Vodafone spoke of a five-digit figure in the second half of the year, Telefónica did not provide any information (ibid.).

Exactly how many more smishing SMS were sent in 2021 compared to 2020 is unclear. However, ntv reported in an article that various police authorities had warned of the fraud SMS in the spring of 2021. In addition, they said that the comparative value a year ago had been significantly lower (source: ntv). So there seems to have been an unusually high incidence.

Let’s start with small numbers for our calculation: the 100,000,000 SMS that Telekom recorded, probably at least 20,000 SMS in the Vodafone network, probably at least as many in the Telefónica network, each of which held around one-third of the market share. That makes at least 100,040,000 SMS. If only one third of this is an increase on the year 2020, that is around 33,346,666 SMS more in 2021.

However, if we assume that the same number of smishing SMS were sent on all three networks, our starting figure is 300,000,000, in which case one third would be 100,000,000 SMS.

It is also unclear how high the number of unreported cases is. What about spam SMS messages that are not intended for smishing?

In any case, it becomes clear: Spam SMS as an uninvited guest has very likely also contributed to the increase in SMS sending.

Summary:

Spam SMS and especially smishing SMS unfortunately have their share in the increase of SMS sending. It is likely that the number of spam SMS increased by between 33,346,666 and 100,000,000 in 2021 compared to the previous year.

Last but not least: Two-factor authentication

To start with, two-factor authentication is a broad field. It is used in online banking, but also in many other scenarios, for example when registering or logging into certain accounts, but also for resetting passwords or sending or receiving sensitive data via certain platforms.

Finding really meaningful figures on the use of 2FA SMS is difficult, so let’s try to derive realistic numbers.

In 2021, approx. 50% of all Germans between the ages of 16 and 74 used online banking. That’s roughly 31,666,666 people (source: Destatis). Since 2FA in online banking has been mandatory in the EU since 2019, this probably also corresponds to the number of users who use 2FA in online banking.

At this point, we unfortunately have to make a guess as to what percentage of 2FA messages are sent via SMS. So let’s estimate ten percent: 3,166,666 people.

If all these people receive two 2FA SMS per month for their online banking, we are roughly at 75,999,998 SMS per year.

Good to know

German banks Sparkasse and Volksbank will gradually stop using SMS-TAN in 2022 (source: Handelsblatt).

However, it can be assumed that some customers will still have received SMS for this purpose in 2021.

According to a survey summarized on Statista, in 2021 “[…] 49 percent […] of German Internet users also used two-factor authentication with at least one other online service […].” (Source: Statista)

If we again assume the age group between 16 and 74, that’s 31,033,333 people. Again, we assume ten percent SMS usage (3,103,333), each of whom receives two text messages per month. Here, we would add another 74,479,999 SMS per year.

Again, how accurate these calculations are is relatively difficult to estimate because there are no reliable and generally valid figures on SMS sending for 2FA. So we refer to estimates. However, with such a large number of recipients, a deviation of one percent or one more SMS sent on average already makes a relatively large change in the result.

If, for example, both in Online Banking and the other example people were to receive one more SMS per month on average, the total would already be 225,719,964 SMS instead of 150,479,997 SMS.

It is precisely this circumstance that suggests that the Federal Network Agency’s assumption is realistic. Even a relatively small individual increase makes a big difference when it comes to 2FA SMS.

If you’re now asking yourself “Why is the number of SMS increasing if fewer and fewer SMS are being used for 2FA in online banking?”, you’re not alone. On the one hand, many banks will still have used SMS-TAN in 2021, and on the other hand, user numbers in online banking have been increasing for several years. The use of 2FA for professional purposes is also likely to have increased in the pandemic, not least because a lot more people have been working from home.

Summary:

Here, the numbers are particularly difficult to estimate because even small deviations make a big difference in the final result.
What is probably most meaningful is that in our example, just one additional SMS received per person per month means that a total of 75,239,967 additional SMS would be sent per year (assuming ten percent 2FA use via SMS for each of the people who use online banking and also receive 2FA in other areas).

This therefore means that if both the number of online banking users and the general use of 2FA increased from 2020 to 2021, the share of 2FA SMS in the increase in SMS dispatch is to be estimated as quite high – as the Federal Network Agency does.

Why is the number of SMS increasing? Many pennies make a dollar

So, in the end, the answer to the question “Why is the number of SMS increasing again?” is:

No single factor is solely responsible for the fact that SMS sending increased last year.

However, the Federal Network Agency’s assumption that 2FA SMS is largely responsible for the increase is realistic, simply because of the huge mass of messages that quickly accumulates in this use case. But test results and other notifications via SMS will also have contributed their share to the increase.

We will probably be able to tell from the development in the coming years what share the 2FA messages actually have in the increase. Since the numbers of COVID tests have dropped sharply, the same will be true for sending test results via SMS. However, we must also keep in mind here that financial service providers in particular may have their 2FA verified by their own apps in the long run.

However, the A2P sector is also still seeing a significant increase in the number of SMS sent.

So how SMS messaging will evolve in the coming years remains to be seen.

 

Do you have any thoughts, theories or other ideas to answer the question, “Why is SMS messaging increasing?”

We look forward to hearing from you!

All the best
Your sms77 team

Header picture by akinbostanci via iStock

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