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Telcos could recover $15bn in A2P SMS revenue by tackling grey routes 

Telcos could recover $15bn in A2P SMS revenue by tackling grey routes

Research by Dialogue Communications reveals scale of shady A2P messaging activity.
Telcos could claw back as much as $15 billion in lost revenue next year by tackling application-to-person (A2P) SMS traffic that uses grey routes to bypass charges on the receiving operator's network.
This is according to A2P SMS specialist Dialogue Communications, which said many SMS aggregators, working on behalf of well-known brands, use grey routes to make increased margins from their customers, who believe they are getting a great deal for a bulk messaging service.

Using grey routes, where messages are sent by an SMS aggregator via an intermediate network that has no commercial agreement to terminate an SMS on the receiving network, can also result in customers receiving a large quantity of spam, and increases the chance of non-delivery. It also risks damaging the brand of the company associated with the messages and the operator receiving them.
"There are some firms out there that are effectively not only cheating the operators but also cheating their customers," said Hugh Spear, founder and CEO of Dialogue, in a statement.

Earlier this year, the company tested 199 mobile networks in 84 countries and found that only 23% had no unscrupulous A2P SMS activity. More than half of the networks had significant bypass activity, with 28 of the operators tested showing an A2P SMS bypass rate of 100%.

"Identifying the grey routes, blocking those messages and forcing them onto the controlled network should be a priority for operators," Spear said.
The A2P SMS market is expected to be worth more than $55 billion in 2016, growing to an estimated $70 billion by 2020.
"We believe that operators should have, at the very least, half of that revenue as the carrier of the service," Spear said. However, evidence gathered by Dialogue suggests that operators are currently only capturing a quarter of that revenue.

"In 2017, I believer there is upwards of $15 billion in revenue that operators could recover if they took the right steps now," he said.
Funnily enough, one of those right steps is rolling out Dialogue's Sentinel solution. It sits on the operator's network, and identifies and blocks grey route A2P SMS traffic. That traffic is then re-routed on a white route, sharing the revenues at agreed rates.

"We're not an aggregator, so [we] don't try to sell to brands, or look for ways to reduce our costs through grey routing. Instead, we are committed to guaranteeing to our aggregator and operator customers that we will safely deliver 100% of A2P SMS traffic on net," Spear explained.
"The cost does not change for the brands, it simply ensures the revenue is more fairly shared, the services delivery is guaranteed, and the operator knows what is happening on its network," he said.

Source: Total Telecom