Threats to A2P SMS business
22 Aug 2018
The telecom business is developing at the speed of SpaceX nowadays, constantly increasing its revenues, attracting new technologies, discovering new ways to get added value. Many operators now devote more and more time to the SMS business, which has become one of the largest revenue making activities. With the opportunities for A2P becoming very clear, developing this is a high priority.
Nevertheless, modern MNOs are suffering from threats to the A2P SMS-business, in the form of other players interested in making a quick buck or reducing costs. What exactly are these so-called threats? GMS experts, Dmytro Lytvynov, Andrew Vashchyshyn and Vadym Potynskiy shed light on the three most significant threats, in this revealing article.
Grey routes are probably the most frequently-faced problems by MNOs; one that causes huge losses to an operator. Just this year, according to a Mobilesquared prognosis, $5.76 billion will be lost due to grey route traffic.
Using grey routes leads to unmonitored traffic to an MNO, which in turn results in lost profits, and provides other players with an opportunity to deliver A2P SMS at very low or even zero expense rate.
The most common instance of this is A2P traffic delivery via P2P links. This is partly made possible thanks to the "bill and keep" commercial model for AA19 contracts, whose original purpose was to make an MNO’s commercial relationships easier. But now, it is this which has made it vulnerable. Delivering international traffic as roaming P2P messages is not hard to spot, but preventing this bypass even with a Firewall solution in place is much harder, as this would necessitate revising agreements in place between the parties who might not be interested in doing so.
The other side of grey routes is local aggregators, who are making the most of the possibility to terminate international traffic to an MNO's network at national rates by manipulating text and SenderIDs. Such bypassing could be prevented by putting in place measures to cover the legal and technical aspect of the relationship between an MNO and the local aggregator.
One of the most troublesome examples of usage of grey routes is interconnect. A small MNO, trying to survive and turn a profit using any means possible, might take advantage of the opportunity interconnect presents. Overcoming this is made all the more difficult because it is local regulators who set the rules that regulate traffic flows and MNO relationships, and as we all know, changing regulations is not something that happens overnight. Zero rates, which are no rarity, are often a problem as well.
So, how does one tackle these problems? The first is Firewall, the second is a smart rate policy, and last but not least, is the legal aspect, which should safeguard MNO's interests.
Traffic migration to OTT
The number of OTT messaging users worldwide is expected to exceed 2.4 billion by 2020. Is it any wonder then that the dynamic A2P messaging market has seized the possibility to use this as a tool to reach the end user through the application, so that OTT messengers have started enabling inbound A2P SMS traffic termination.
Despite SMS having the highest read rate (98%) in comparison to other communication channels like e-mail and OTT, more and more global enterprises are moving their A2P SMS traffic to OTT because of lower prices and wider visualization features.
This has led to many national and international A2P traffic streams bypassing an operator’s network by migrating to the internet and the operator suffering loss of revenue.
However, rather than hit the panic button, we recommend that operators ride the wave of the trend. Having a wide list of local and international enterprises directly connected to the
operator’s network on board as well as a trusted SMS HUB partner with a multi-channel solution in place, an operator adds an additional service to its portfolio by offering this (termination of A2P traffic to OTT) to enterprises and then growing this business teaming up with the SMS HUB partner. This way, an operator is handling A2P traffic streams, growing the volumes and continues to remain in the game.
The problem of traffic blending is not an easy one to tackle for MNOs. Even having an advanced and multifunctional Firewall Solution in place does not guarantee protection.
An MNOs business cooperation model with a huge number of A2P hubs often leads the latter to find ways of winning the SMS traffic among competitors. Given that only the major A2P SMS traffic generators have their own conversion tracking platforms, part of the SMS remains without any control, both on the MNO and the service side. As a result, unprincipled A2P hubs start to mix the SMS traffic and block part of the messages, even going so far as to not to send it to the MNO’s network. At the other end, traffic generators receive fake delivery reports, and the hub makes additional profit without incurring any expenses.
Such cases are very hard to uncover and bring under control. One of the instruments is conducting a stress test monitoring the traffic of the established service. Furthermore, MNOs should reduce the number of the rogue A2P hubs and opt for and, as the case may be, hold on to, the reliable players, who have both direct connections with A2P SMS traffic generators and are able to provide tools and resources which will monitor, uncover and solve such issues with a Monetization solution.
Progress is ever-present in the Telco industry. Progress should not, however, apply only to profit maximization and network security, but also to methods used for traffic bypassing.
MNOs should never give up the battle to protect their interests, and the best ally in this battle is the right and trusted partner. Find out how GMS can guide you through this path.
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