Grey routes: how to detect and monetize
25 Sep 2018
The global A2P SMS market is growing exponentially. In 2017, 1.67 trillion A2P messages were sent, which will rise to 2.8 trillion by 2022. With over 20 billion SMS messages sent every day, SMS has become a primary way of communication and a vital marketing tool for enterprises to engage with their audience.
And mobile operators are central to unlocking the revenue potential.
Billions in lost revenue
Many mobile operators (MNOs) are losing significant profits to so-called grey routes and fraudulent messaging. Although total grey-route traffic is dropping, it still accounts for 47.7% of total A2P SMS messaging traffic.
Revenue leakage costs the genuine A2P SMS messaging industry $5.76 billion in 2018.
That’s why more and more mobile operators are deploying SMS Firewall solutions. Mobilesquared forecasts the number of mobile operators investing in a next generation SMS firewall will almost double by 2021: from 48% in 2017 to 83%.
Using a grey route is the equivalent of ordering socks on Aliexpress: it is cheaper than in the nearest shop and you will probably get your parcel eventually, but don’t expect to get socks of a declared quality, color, and size.
How to detect
There are a range of options available to the operator market.
MNOs can install the traditional licensed SMS platform in their data centers and integrate them into the messaging infrastructure.
Another option is companies offering a turnkey solution — addressing technical, commercial, and legal issues on a long-term basis. Such companies can look for inconsistencies and surges, follow traffic, and examine different data waves in real-time.
Once an operator detects illegal routes, they need to take actions to monetize them ASAP:
- analyze the type of traffic and source used for terminating the traffic
- design the correspondent blocking rule and implement it in the firewall platform
- monitor firewall logs and verify rule’s proper operation, without impacting legal traffic
- inform the businesses generating A2P traffic that they are using illegal routes for traffic termination to its subscribers, block the traffic
- perform tests and monitor the traffic to detect new existing grey routes
Why it is an issue
Fake delivery reports
With legal routes, operators know the exact routes messages take and get an accurate report on delivery and open rates. In short, they get complete transparency. With grey routes, they don’t.
As only large A2P hubs have their own conversion tracking platforms, a certain portion of messages remains out of sight to both a mobile operator and a company generating this SMS traffic.
Dodgy hubs often manipulate the A2P SMS traffic to bypass firewalls, mix legal and illegal routes, block or change part of the messages, not even sending them to recipients, yet continuing to send fake or patchy delivery reports to the operators. As companies generating A2P traffic operates globally, it is a great challenge to track conversion rates and keep an eye on every conversion leap.
More importantly, mobile operators can’t guarantee customers’ data is in safe hands. Unauthorized routes can expose the message data to various security risks.
A mobile operator could well end up sandwiched between an irritated customer on the one hand, and a revenue leakage and legal issues on the other. Needless to say, data leakage is a disaster for any company, and data integrity has really become a hot topic.
Delayed SMS delivery
Typically, using a grey route means sending messages via many hops, without paying an interconnect fee to one of the networks involved. It takes time, so messages are often delayed or, worse still, never reach their destination.
Thus, one of the key advantages of SMS — immediate delivery — vanishes due to grey routes. A delayed delivery also creates a poor customer experience and could damage your brand image as a trusted mobile operator.
Network overloading and degradation
Unpaid traffic inflates the network and creates overloads that cause performance degradation. It’s like someone is partying in your house without even inviting you.
Altered message text
Again, while being routed across various shady platforms, a message can be altered or damaged. The text can contain broken brand names and hyperlinks. Any non-standard characters like currency symbols can be replaced with random characters. Long messages can be split into two, and the second part arrives before the first or does not arrive at all.
No sender ID
Rather than an SMS being sent from a brand, SMS via grey routes often do not allow to identify whom it is from. Sometimes, SMS content is manipulated and a brand name is removed or replaced with a random number. In some countries, such issues are also a matter of regulatory concern.
How to monetize
To minimize the risk of fraud, MNOs have to be fully and constantly aware of threats in the messaging field. This means proactive monitoring and integrating anti-fraud solutions.
There are several ways for MNOs to secure their networks against unauthorized traffic.
Installing an SMS Firewall together with a deep evaluation of the network is the first step in this journey. These include checking all possible options of SMS delivery with interconnect termination rates and ensuring all their interconnect agreements are as up-to-date as possible.
Just installing an SMS Firewall will not solve the problem. MNOs need to stay informed about all channels used by global enterprises generating A2P SMS traffic, track the volumes, perform tests, and update the blocking rules on a daily basis.
Key challenges to mobile operators:
- they don’t have the full picture of businesses generating A2P traffic
- they can’t test all the services as they are currently delivering traffic
- they aren’t aware of all the cost-effective routes on the A2P market
- they aren’t directly connected to businesses generating A2P traffic
- they feel a lack of resources for immediate implementation of the complex project
Securing your network is just the first step. The second one is continuous monitoring because the intermediaries keep digging into possible loopholes to enter the network using inexpensive routes.
The most efficient way to close revenue and security holes in your mobile network is to partner with a reliable A2P messaging company, that could convert International A2P SMS traffic into one of the main revenue stream channels.
Choose companies that have both direct connections with A2P SMS traffic generators and are able to test, monitor, uncover, and solve such issues with a Monetization solution.
After all, if you can increase your profits, why not look into it? Reach out to us and increase your profit.