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A2P messaging


Mobile operators have been fumbling to pave their way through the dark alleys of grey routes. A whopping amount of $18 billion was lost in 2016 worldwide, by mobile network operators (MNO) due to the unauthorized grey routes. Grey routes account for two-thirds of A2P SMS traffic. This means that only one-third of A2P traffic can be monetized by mobile operators. On the other hand, mobile operators who are using SMS firewalls or white route have a reported massive reduction in unauthorized messaging traffic. White route A2P messaging is the key to success as it provides a legitimate messaging service which makes payments to a mobile operator for each message delivered on its network.

A2P messaging can be successfully used to drive customer engagement by exploring various possibilities. A2P SMS sector is projected to grow by 36% on an annual basis, thus having vast potential for the telecom operators to monetize and increase their profits. The following ‘use cases’ will throw some light on the uses of a white route as an A2P messaging monetization solution.

Use cases on white route monetization platform deployment:

  • A leading operator in Norway has about 3.4 million subscribers. Adoption of white routing has shown positive results in the messaging traffic as well as the messaging revenue. The ARPU (average revenue per user) increased from $0.10 to $0.50.
  • Another MNO in Africa with a subscriber base of 20 million saw an increase in SMS price from €0.002 to €0.016 and an uplift in revenue of €17 million per year after the white route deployment.
  • Leading MNOs in the Middle East have augmented their A2P SMS revenues by implementing different pricing models for different A2P use cases for their users. Using a high level of quality control for the traffic they used a spam filter to direct revenue generating traffic into the MNO’s network. Filtered out fraudulent traffic and ensured that the local regulations were followed. As a result of this, the MNO in the Middle East was able to distinguish the nature of the traffic coming into and terminating on its network.

How grey routes work and possess a threat to MNOs?

A global SMS system consists of A2P connectivity network, and in most cases the MNO’s have these approved. The A2P network uses separate connectivity from the P2P network. The main reason behind this is to control spam and grey route. A grey route traffic attempts delivery outside of approved A2P connections into the MNOs.

Such traffic leverages the P2P network to avoid MNO fees or approval processes. These grey routes also leverage the sim farms that are connected to computer servers instead of mobile devices. These sim farms are an attractive option for some messaging businesses as the farms provide a cheaper alternative. Messages from them may be bounced from one service provider to another to avoid legitimate operator connections. MNO’s block such sim farms and take appropriate measures.

The mobile operators apply a termination fee to SMS traffic entering their network from another network. This is done through standardized agreements. As there are many signals that flow between various operators, the SS7 networks can be left open.

In the P2P messaging, the traffic between two MNOs is balanced and hence the termination fees effectively cancel each other. Grey routes take advantage of this in case the originator is outside the country. When thousands of “local” or national phone numbers of SIMs in the SIM-farm are levered, they appear as a P2P message bound for subscribers with a local origination number. Hence the A2P traffic suffers as it travels several hops into the destination operator.

Enterprise customers may pay a lower price, but the traffic has a relatively low chance of delivery. Apart from sim farms, global title scanning also possesses a threat from the grey route. The fraudsters mimic the GT of the operator in order to terminate on the network, and it is made to look like operator’ own traffic.

Conversion and integration to white route A2P messaging

The key to any successful white route A2P messaging deployment is considering various levels of protection and monetization opportunities. Telecom operators should not only consider their current needs but also incorporate their future needs as the industry evolves. Having a partner who provides an apt A2P white route solution will lead to optimal setup and performance for the SMS firewall.

Telecom operators who wish to covert from grey routing to white routing should have the required infrastructure in place. Either a local infrastructure or a cloud based system should be present for the conversation to take place. Operators having the proper infrastructure in place, can easily go forward with the conversion process.

Legal Considerations
Be aware of the regulations concerning the filtering practices. Various regulations can be placed by the national regulators. Know these legal considerations thoroughly as there can be restrictions even on the location of the implementation and SMS data storage.

Business Considerations
Grey routing makes a huge loss to the revenue, and hence white routing is looked upon as the required solution. Before deployment of the white route, the telecom owner should be prepared with a business plan having the forecast of the expected revenue generation after the deployment of the white routing system.

Commercial Considerations
Commercial considerations for the operator will include, having a new pricing policy to increase profits and market share. The policy should not hamper or destabilize the market.

Technical Considerations
The conversion process from grey routing to white routing can be carried forward for both the solutions like a local (on-premise) solution or a cloud based solution.

Operational Considerations

Operational considerations include handling the processes in-house or outsourcing them. Whatever the operational system is present with the operator, the conversion from grey routing to white routing should be easily done.

Guide to Deploy A2P Messaging Monetization Solution

Monetizing the A2P revenue by eliminating the grey routes will provide a secure environment to subscribers and a smoother customer experience. Step by step implementation as mentioned below remains the key for successful monetization.

Network audit: The MNO’s are advised to do a thorough audit or profiling of their network to understand the shortcomings.

Implement an SMS firewall: MNO’s must ensure that they have the blocking control in place. They can either maintain the filter internally or can find a partner to get it done for them. Manual filters must not be maintained.

Connect to aggregators: Some things are left best to experts. MNO’s can connect to aggregators to combat the fraud. It can include some local and few international aggregators.

Key Elements of A2P Monetization

  1. SMS Firewall

A Firewalls identifies, filters and blocks unwanted and unpaid SMS traffic. Unless detected, such traffic infiltrates the network and affects the subscribers. Operators are advised to install an SMS firewall considering the approach of monetization. Install a firewall that identifies and filters even the disguised A2P messages that pass into the network through domestic P2P channels.

Signaling based firewalls have basic screening capabilities and can detect some amount of spam and fraud. It is not an efficient option for A2P monetization.

Gateway-based firewalls are the on-premise hardware-based solutions. Although they can offer better filtering capabilities for A2P detection, it involves high CAPEX and OPEX requirements.

Integrated solutions are again in-house based systems offering a limited subset of blocking features integrated on an STP or SMSC.

Reporting based firewalls have powerful analytical tools, but lack in the blocking function. Hence you cannot expect to the fake protection and MO filtering.

IP based solutions are specially involved for security and signaling analysis than revenue assurance. Again, they lack in identifying the grey routes and providing faking protection.
Home routing solution works as a network node within the operator’s network, even if hosted as a cloud service. This solution offers the maximum benefit by efficiently protecting from faking. It also helps in protecting customers when in roaming mode.

A good firewall solution is critical to achieving full monetization of A2P. Again, the MNO’s should make sure that the firewall setup is updated to tackle the constantly evolving fraud and misuse techniques.

  1. Tracking and Reporting System

Tracking and reporting system involves a combination of hardware and software allowing the mobile operators to monitor and administer SMS traffic in their network. All the reports are then prepared and analyzed based on the real-time monitoring. This tracking system reports:

  • Traffic received
  • Traffic volumes
  • The originating partner
  • Delivery routes
  • Applicable fees

Types of Infrastructure for Solution Deployment

The infrastructure for the A2P messaging solution can be either a:

  • Standalone hardware device
  • Managed service hosted on a cloud

The conversion for grey route A2P messaging to the white route is supported by both the above-mentioned options. However, deploying a cloud based solutions comes with its added advantage of reduced CAPEX and OPEX. Cloud based systems reduce the cost as there is no requirement of upfront investments in infrastructure and Human resource, as opposed to the standalone hardware solutions. As a result, the overall A2P messaging revenue increases due to low service startup costs.

A2P Messaging Vendor Requirements

MNO’s looking to integrate white route A2P messaging solutions should look for the following qualities in the service providers/vendors:

Global Reach: MNO’s should understand their reach requirements and type of connectivity required. Some vendors are local while others focus on global connectivity.

Availability: Choose a vendor who caters to the availability requirement of the MNO’s through network architecture, service level agreements and service availability.

Performance: A vendor’s performance or the scalability can be determined based on the number of messages they process in a month. Comparisons done according to the set benchmark can help the operators select the vendor based on the optimum scalability requirements.

Quality: Quality can be determined by analyzing the delivery rate of the messages and the time of the message to cross the SMS platform. Understand the delivery rates provided by the vendors and compare the same.

Security: The vendor’s security protocol can be analyzed through their information security program, the privacy of proprietary or personal data, supporting documentation, standards used and the types of controls used to support general data protection.

Summarizing requirements for A2P messaging monetization solution

Converting grey route A2P messaging to the white route is a good business strategy as it helps in:

  • Controlling revenue leaks
  • Generating revenues from enterprise engagement
  • Increasing profits from roaming partners
  • Gaining control over the network traffic
  • Providing a secure environment to the network subscribers
  • Increasing customer loyalty
September 22, 2017 0 comment
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These are interestingly turbulent times for telecom operators. On one hand, the players have to contend with rapidly falling average revenue per user, wafer-thin profit margins, increased competition, the list is endless andon the other, Over-The-Top (OTT) players have stolen their customers under their very noses, with the lure of free voice and messaging applications.

To illustrate, according to mobilesquared, in 2011-12, operators elected to either block OTT traffic, introduce an OTT-related data usage tariff, develop their own white-label OTT-based offering, or aim to provide an advanced range of messaging services, such as SMS forwarding, SMS signature, and SMS blacklist. Jumping ahead, in 2012-2013 the strategies included figuring out the most viable methods to capitalise on the OTT communications opportunity, including (but not limited to) OTT-to-SMS on-net termination and, (more surprisingly) partnering with OTT providers. Cut to 2014-a survey conducted by mobilesquared revealed that operators finally bit the bullet and chalked out an OTT communications strategy.

At the end of the day, however, I can safely say that these efforts (though laudable) didn’t get them too far, quite the opposite, in fact. Since then, the telecom industry has grown by leaps and bounds, throwing new market conditions and players into the mix, tempered by even more cutting-edge competition than ever before. The result? A lot of chaos, of course!

Here’s the catch, though. Operators have been so busy fighting multiple battles that they’ve failed to recognize an extremely lucrative potential revenue source waiting in the wings. I allude, of course, to Application-To-Person (A2P) messages. Now, we’ve all heard and read about debates that have cited A2P messaging as the “new face” of the messaging space (in terms of service monetization). Amidst gloomy reports of declining Person-To-Person (P2P) messaging revenue, it came as no surprise that enterprises were quick to adopt A2P messaging as an integral cog of their multi-pronged customer outreach strategy.

However (and this is the tricky part), operators and enterprises are still failing to revive their moneys (to some degree, at least) from messaging services. The first (and arguably most interesting) reason is that the as per mobilesquared, though the A2P messaging space is booming (valued at $12.88 billion in 2015 and forecast to touch $58.75 billion by 2020), operators are able to monetize only a mere one-third (or even less) of this revenue. Why? Well, because there exists a fair amount of uncertainty around the volume of illegal A2P traffic. Here’s why- essentially, A2P SMS traffic is divided into three parts, namely; white, black and grey route traffic. Without delving too much into the nitty-gritty, it ought to be sufficient to say that apart from thoroughly examining white route traffic, it is impossible for telecom operators to generate bills for SMS traffic, without the obligatory pre-set termination agreements in place. Why? Because operators will be unable to get a clear picture of the SMS traffic being terminated on their network-thus enter grey and black route traffic.

The threat of grey and black route traffic is very real, in fact. Juniper Research provides an interesting perspective on this. In an attempt to quantify the scale of the business operators lose to grey route traffic; they multiplied the annual grey route traffic with the price differential between P2P and directly connected A2P traffic. this translates into an annual revenue leakage of nearly $11.9 billion in 2016, falling to $8.6 billion by 2021. The cumulative revenue loss for this period will stand at $62.5 billion. That’s not all; mobilesquared has estimated that today, grey route traffic accounts for approximately 65 per cent of total A2P traffic.

Clearly, operators need to think of foolproof ways to leverage the business potential of A2P messages to the fullest. In my opinion, the following measures are a good place to begin:

Focus on Generating Revenues from Enterprise Engagement

Keep in mind that today’s customer has become very demanding. They demand constant engagement with brands, the price of retention. This, naturally, gave rise to communication options with MMS, push messaging and newer channels like chat applications and other IP based forms of communication.

So, to ensure optimum monetization of A2P messaging traffic, what is the need of the hour? Well, enterprises are looking for solutions that facilitate the creation and delivery of the messaging process by providing tools that allow personalised targeting, control and filtering of unwanted messages and strict adherence to existing contact policies across a range of messaging options. And crucially, by providing a range of messaging channels, usually SMS, USSD and MMS, enterprises and operators are able to offer their customers choice over their preferred channel of communication, determined by taking a customer centric view. Typically that breaks down as; SMS (75-85 per cent), USSD (10-15 per cent), MMS (5-10 per cent).

Control and Curb Revenue Leakage and Spam

Just to re-emphasise on how real the issue of grey route is; as per industry estimates, operators are losing 90 per cent of their revenue from A2P messaging to entities which are using grey routes to terminate the traffic. A staggering 75 per cent of telecom companies do not have any control over these grey routes and are thus unable to leverage the potential of A2P messaging. So, in my opinion, a two-pronged solution in this case would be:

  • Ring-fencing the network to block grey routes and curb revenue losses
  • Identify a suitable partner which offers business consulting services to identify and analyse various patterns of fraud in the network, and to safeguard the network against new fraud mechanisms.

Unearth Revenue lost on Grey Routes

Currently, as per industry reports, SMS aggregators are capitalising on the A2P SMS opportunity, by purchasing the SMS traffic wholesale from operators. What’s worse, they’re monetising it via either white or grey routes. Mobilesquared has stated that Tier 1 aggregators often have direct connections to the SS7 network, enabling them to provide the assurance that only white route traffic will be generated. Naturally, then, aggregators who do not make such promises deploy grey routes to get the job done. In this case, the operator ought to appoint the best aggregators in the market-at least two or three at that! This is a win-win proposition, as they are all interconnected with each other so the operator will, in any case, get the traffic. That is, of course, if the player has managed to technically funnel the traffic via their appointed aggregator partners.

In sum, the time, dear operators, is NOW! The more you let go of the A2P opportunity, the more at risk you are of becoming the fabled “dumb pipe” or, worse, letting the OTT players win. Which one will it be, then?


December 29, 2016 0 comment
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It would be an understatement to say that Application-To-Person (A2P) messaging has been widely accepted as the most viable near-term monetization strategy for telecom operators. Indeed, the numbers are impressive-Ovum expects A2P traffic will touch 2.21 trillion messages per day in 2017, representing 31.3 per cent of total messaging traffic. Furthermore, Juniper estimates that the A2P SMS industry will be worth $60 billion by 2018.

Meanwhile, telecom operators themselves have enthusiastically jumped on to the A2P bandwagon. According to mobilesquared, a majority of mobile operators are witnessing year-over-year growth in A2P messaging, of between 6per cent-36 per cent, with 56 per cent of mobile operators registering a growth in A2P traffic in 2015, from 49 per cent in 2014.

Now, here’s where it gets a bit tricky. While operators are, indeed, pinning their hopes on A2P messaging, the reality is that this is a double-edged sword. Simply put, while the promise of revenue is real, so is the threat of increased spam and illegal messaging attacks on subscribers.What’s more, according to industry surveys, operators simply do not have a game plan handy to respond to the threat and as a result, are also losing out on monetization opportunities.

The Rise and Rise of Spam

So, how real is the threat, really? To illustrate, permit me to cite examples from mobilesquared’sSecure Networks Key to A2P Monetizationreport-spamming is considered the greatest network threat, followed by spoofing and virus distribution. In addition, as per industry reports, globally, spam accounts for 15 per cent of all SMS messages sent, which represents 1.2 trillion spam messages each year. Let’s break it down further.

Interestingly, the GSMA has identified the most common types of SMS-based spam as regular spam (unsolicited advertisements sent to subscribers), flooding (large amounts of traffic sent to disrupt services), faking (messages sent from an SMSC that fakes its own identity to avoid charging) and spoofing (messages sent with a fake MSISDN as originator to fool the recipient).

Let’s consider two region-centric examples-in the US, text messages have held their own, despite the growth of other categories. Needless to say, this medium is a prime target for telemarketers and fraudsters. The most commonly used form include free gift card offers, marketing promotions and phishing scams, and often lead to serious misuses of personal information and identity theft. Now, consider Egypt-with 96 million mobile subscribers and a mobile penetration rate of over 110 per cent, isn’t it mind-boggling to consider the volume of spam messages that circulate in Egypt, and all over the Middle East!

Spam and the Telecom Operator

Now,in the context of a mobile operator, the range and scope of SMSs sent increases to include operator-generated messages, which are typically controlled by different teams within the company. In a nutshell, these include: marketing of value added services (such as product promotions), advertisements via the operator’s business team (typically for a specific business, such as wireless, enterprise, etc), content provider-centric messages (for specific content) and location-based campaigns (depending upon the customer’s location). These messages are typically sent across various channels (depending upon the customer’s preference, of course), such as SMS, USSD, MMS, email, an interactive voice response, et all.

The question now is-why does the customer dismiss these messages as spam, despite being from a legitimate source (i.e. the operator)?The simple answer is-because, in reality, the operator doesn’t have control over these messages. Well, not in a centralized manner in any case. The catch here is that these messages are sent in an independent fashion, depending upon the channel being deployed and the purpose for which it is being sent. In other words, picture several communication platforms, all operating independently of each other and all viewing a particular set of subscribers in a “siloed” fashion. At the end of the day, each of these platforms are more than likely to send multiple and frequent message to the same set of subscribers, thereby doing nothing to ensure customer stickiness. Quite the opposite in fact-the customer is likely to be very annoyed. Another downside of this is that more often than not, a large chunk of one’s subscriber base is left unaddressed. Clearly not an advantageous situation for any telecom operator!

Let’s move on to the impact spam will have on an operator’s overall locus standi. Bombarding the customer’s inbox with SMS spam is more than likely to lead to increased customer complaints, brand erosion and customer churn. Similarly, sending fraudulent messages like promising a subscriber large sums of money is likely to lead to financial losses for both, not to mention that the customer will likely lose faith in the operator completely (along with other sensitive information)! Illegal bulk messaging is another sure-shot way for the operator to lose the customer-and pay a hefty fine to the regulator, to boot!

Last, but certainly not the least is the problem of grey routes. Now, going back to my original point, this is the main reason why operators will NOT be able to effectively monetize the A2P opportunity. How? Simply because grey routes account for 66 per cent of A2P network traffic, according to mobilesquared’s report. Many operators lack visibility into grey route traffic, because the tools to monitor and filter the message types traversing their networks aren’t available. This naturally adversely impacts an operator’s monetization efforts, making grey routes an attractive option for low-cost SMS aggregators with no commercial agreements with destination operators. The result? Revenue loss for the operator.

Just an interesting aside into the actual depth of the issue-according to mobilesquared, only 33 per cent of mobile operators are able to monetize A2P messaging, leaving the rest on the table. Imagine the possibilities!

So, what can an operator do to tackle this issue? Well, the commonly held view is that implementing an SMS Firewall can help contain the damage to some degree! According to industry surveys, it can help operators secure their networks and generate revenues from legitimate A2P use cases.

From our huge deployment base of messaging and firewall solutions, we have found that key reason for adopting SMS firewall solutions in the past has been network security, anti-spam and/or fraud prevention, but we are seeing a shift in that thinking and customers are now expanding and investing such systems for A2P messaging monetization.

Secondly, along with the firewall solution, operators are now looking for a comprehensive and unified policy control solution for the complete messaging infra across all channels and use-cases. This combined approach of a firewall plus a central policy control is the way for the future for enhanced customer experience for the subscribers.

Operators need to ensure that the “SMSBOX” doesn’t become “SpamBox” and is ignored by the subscribers and taken over by Over-The-Top players such as WhatsApp completely.

March 31, 2016 0 comment
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