If you were to ask most communications service providers (CSPs) for their top three hot-button issues, it’s unlikely that caller ID services would be named among them. Caller ID is not something that most CSPs spend a lot of time thinking about. It’s a steady revenue generator, to be sure, one that hasn’t changed much over the last twenty years. But change is on the horizon… and sooner than many CSPs realize.

Subscribers these days are very clear about the importance of caller ID services. In a recent study commissioned by Neustar, every subscriber ranked caller ID as a beneficial service (source: Market Strategies International, September 2014). In fact, half of those subscribers said they would switch carriers if they ceased to offer caller ID. On the surface, those numbers might suggest that subscribers are satisfied with the current state of caller ID, but the reality is very different. Many subscribers believe that caller ID services have much room for improvement, especially in terms of the quality and reliability of caller ID information.

The rise of caller ID spoofing has done much to erode the consumer trust of caller ID. Just last year, a nationwide scam that involved caller ID spoofing of the Internal Revenue Services affected an estimated 450,000 people and resulted in more than $5 million in fraud. Caller ID spoofing is now hitting closer to home as subscribers report seeing their own identities spoofed on incoming calls. Given the ease with which even inexperienced hackers can spoof an ID—there are dozens of tools available online to help you do it, some of them offered for free! —it’s not a problem that’s likely to go away anytime soon.

Even when subscribers trust the caller ID information, they can’t always understand it. Many service providers still use the standard 15-character display for caller identification, which often results in names being awkwardly truncated beyond immediate recognition. And if you don’t know who is on the other end of the call, then caller ID isn’t really identifying anything. For residential subscribers, this might seem a minor annoyance—although, it is plenty annoying to pay for a service that doesn’t do what it’s supposed to do. For businesses, however, bad caller ID can cost them real revenue in terms of lost sales and missed appointments.

Until recently, service providers have been the only game in town for caller ID. But that’s changing. Today, there are over-the-top providers who offer enhanced caller ID services as a standalone app. And just this month, social media giant Facebook entered the caller ID space with its own app, Hello. For service providers that count on the steady revenue stream generated by caller ID services, this influx of outside competitors is damning news.

So what can CSPs do to protect those revenue streams? They can start by plugging the holes that exist in today’s caller ID services and delivering a better experience. For example, service providers can start by offering richer caller ID information beyond 15 characters on smartphones, tablets, and other devices that support wider displays. Adding contextual information to caller ID is another good idea. In the near future, subscribers will not only know who is calling them, but where they’re calling from, and perhaps even the nature of the call (e.g., friendly, urgent, silly) using some type of caller ID emoticons.

Authentication is another critical piece of the caller ID puzzle where service providers have an inside advantage. Because CSPs can already authenticate users through their subscriber database, it’s not a big leap to begin providing authenticated caller ID services as well. Of course, providing security and context can become sketchy outside of a provider’s own subscriber base, which is where a trusted third-party data provider can really help. Neustar is a trusted source of caller data and a leader in consumer privacy, with detailed information on more than 40% of all U.S. subscribers.

Visit us online to learn more about Neustar’s Caller ID services.