The volume of A2P (Application-to-Person) messaging is expected to increase by 20% year-on-year over the next 4 years, skyrocketing to more than 2.7 trillion by 2022 (Juniper Research). In addition to "historical" messaging aggregators, new industry players have shown a great deal of interest in this trend, and are openly pursuing unconventional solutions to deliver SMS.
This has been an unexpected turn of events, catching many MNOs off guard and leaving them ill-equipped to properly capture incremental business value from A2P – with astounding estimated losses of $10M in earnings on average per operator, per year (MobileSquared). Beyond revenue leakages and QoS issues, MNOs and their subscribers are increasingly exposed to spam, scam, doxing, unsolicited content reception, and harrowing new exposures to liability.
Previously hidden, grey offers are now openly marketed and accessible to all SMS players. Many A2P originators and aggregators use grey routes for the cheapest termination into MNO, sometimes as the only way to continue existing in this ecosystem.
Additionally, SIMBoxing – or the use of machines that house multiple SIM cards to bypass genuine termination and feign quality – is also exploding in SMS and voice. SIMBox Farmers are actively (and creatively!) targeting this arena, and to counter
their practice, it requires intense coordination.
Finally, the fact that international and domestic P2P accesses are often not properly monitored, the entrance of questionable players and the reselling of international numbers, and GTs (Global Titles) by some MNOs add to the instability mix - each taking its toll on A2P traffic integrity and revenue capture.
Ultimately, with less control of senders, subscriber protection is at stake, raising real and pressing concerns for MNOs.
The (very) thin line between "fraud" and vulnerability
SMS revenue leakage is frequently the result of players using the benefit of backdoors left open or other vulnerabilities, rather than "fraud" per se. A2P SMS firewall vendors and "monetization" players struggle to cover 100% of leakage because of inherent challenges in the MNO setup, which include:
- Improper coordination of SMS access resulting in inability to counter spam, fraud, spoofing, faking content
- A fragmented A2P originator universe and the pressure it places on inter-connection and control
- Unclear role of current SMS hubs, domestic interconnections and SMS wholesale access, resulting in traffic imbalances through the blending of A2P and P2P and partners delivering/reselling their SMS access to the market.
- Overlooked SMS business management (that was not expected to boom as such), resulting in complicated and challenging internal legacies (business and organizational)
Closing the liability gap
The main challenge (and the future) we foresee and address is in identifying the sender and assigning it liability for the content delivered.
iBASIS is working to empower customers with its A2P Managed Firewall/A2P Monetization and Subscribers Protection capabilities, top 3 world class ranking in Wholesale Business Assurance, and a mission to reduce fraudsters' business impacts through a "zero tolerance" environment.
But, most importantly, MNOs need to permanently ask themselves the hard questions: do I offer an efficient A2P direct access? Do I have an adequate firewall in place? Am I protecting my subscribers from unsolicited SMS services? Am I sure? Over time, and if not efficiently done, this may become even more expensive than the monetization at stake.
Prior to joining iBasis, Bruno was an early investor and Chief Operating Officer for TransferTo in Singapore, now known as Thunes and DTone. In this role, Bruno oversaw day-to-day business functions while managing cross-functional business units. He contributed to TransferTo's journey from 2009 to 2018, from a small organization out of a single location with USD10 million annual revenue, to a profitable and solid business of more than 120 people, with 3-digit millions in revenue, and a global presence across all continents. He co-sold the company to Ingenico (ING:PA) in 2010 and co-led an MBO in 2013, keeping the company operating under public standard.
Prior to TransferTo, Bruno co-founded Mobile 365 in 1999, later acquired by Sybase in 2006 and by SAP in 2010, and now known as SAP Digital Interconnect.
Bruno holds an Engineering degree with honors from Ecole Centrale d’Electronique in Paris, France.
iBASIS is the leading communications solutions provider enabling operators and digital players worldwide to perform and transform. Powered by Tofane Global, the new iBASIS is the first independent communications specialist, ranking third largest global wholesale voice operator and Top 3 LTE IPX vendor with 660+ LTE destinations. With the integration of Tofane's acquisition of the Altice Europe N.V. international voice carrier business in France, Portugal, and the Dominican Republic, iBASIS today serves 1,000+ customers across 18 offices worldwide.