An Insight on Grey Route SMS: Its Impact & Solutions to Monetize the A2P Messaging Sector

An Insight on Grey Route SMS: Its Impact & Solutions to Monetize the A2P Messaging Sector

Rajdipkumar Gupta

Managing Director & Group CEO, Route Mobile

Headquartered in Mumbai, Route mobile is a leading cloud communication platform which offers a wide range of products & services in Messaging, Voice, Email, SMS Filtering, and Analytics & Monetization.

Grey routes in the telecom industry have been for long affecting revenues of the mobile network operators. Businesses and enterprises holding tight budgets often compromise on their communication by circumventing traditional channels and thus creating a revenue black hole for operators. Now with the advent of cloud, it has further impacted the A2P messaging sector; specifically cloud-based bulk SMS services. Consumers are substituting social media interaction with app-based SMS and Voice conversations. Regulators even impose caps on voice & data charges and on mobile termination rates making it difficult for operators to arrive at competitive price point. In addition, the emergence of OTT services has made MNOs to offer SMS bundles at low prices.

With all of the aforementioned circumstances, many state that conventional SMS is on the decline. However, due to its direct and ubiquitous nature, it still remains an important marketing tool for enterprises, thereby source of revenue for operators. Text messages have an open rate of about 98 percent. It is an excellent tool for verification requests in the form of OTPs (One-time passwords) & two-factor authentication during registration and transactional alerts, while attempting financial transactions. SMS offers an extra layer of security, making it more viable for businesses.

Grey route messages are nothing but legitimate messages channelled through unsolicited, interconnecting network routes that violate global traffic norms. They are largely Application-to-Person (A2P) messages that are illicitly relayed by impostors via channels originally designated for Person-to-Person (P2P) messaging. In plain terms, it is like buying jewellery from a local jeweller rather than buying it from an authorized jeweller certifying product quality. You may
not know that your ornament quality was compromised as it wasn’t assured. Similarly, messages from such grey routes often go undetected and land in your customer’s message box under your network. Operators only receive accurate revenue when messages are sent using IP-based protocols to the destination network.
"A2P SMS market is growing exponentially and SMS firewalls will play a crucial role in authenticating the flow of legitimate A2P message "

Apart from losing revenues, an operator’s brand equity is also at stake. Users responding to spam messages get tricked into sharing their personal details or charged higher, while replying on interesting offers through premium numbers. The database collected with subscriber information is further sold to third parties for duplicitous marketing purposes. This results into losing valued subscribers as they switch to other competitive operators. User experience diminishes as the subscribers are subjected to unwanted messages they have not opted for.

At operator’s end, customer service becomes a nightmare with unhappy users and their complaints. MNO’s have therefore stepped-up to make sure they protect their revenue and brand equity, by increasing the security levels with spam filters. This will not only help them reduce spam threats, ease operational cost, but also elevate their subscriber’s experience. Versatile technologies are now available to eliminate spams by providing MNOs revenue assurance.

Such advance detection technologies offer real time filtering, monitoring and detection of all incoming A2P messages enters an operator’s SS7 signalling channel. These sophisticated systems, filter the messages basis Sender IDs, Number addresses and GT addresses. Once a message is identified evading all these parameters, the incoming traffic gets automatically blocked by the system. Route Shield is one of the products in the market that not only helps in monitoring & filtering of incoming messages, but also offers analytical tools to understand the A2P ecosystem and plan against SMS threats.

Awareness and detection technologies are evidently changing the scenario, as operators are being more cognisant and implementing spam detection systems to monetize their network. However, there is still some percentage of SMS traffic that loses to grey routes. According to the Mobilesquared research report (Global A2P SMS messaging forecasts 2017-2022), white-route messaging traffic surpassed grey-route traffic in 2017 with revenue totalling to more than $10 billion. Also by 2022, an estimate of 83 percent of operators will have deployed A2P Firewalls and white route revenues of $25.86 billion will represent 97 percent of the market value.

A2P SMS market is growing exponentially and SMS firewalls will play a crucial role in authenticating the flow of legitimate A2P message. The operators are evidently moving towards incorporating SMS firewalls into their network to tap the full potential of A2P messaging and protect their revenues.