By Sizo Nkosi, Regional Operator Partnership Manager at Infobip
Optimal monetisation of business SMS traffic across their ecosystems has traditionally been a complex issue for many Mobile Network Operators (MNOs), yet, boosting revenue across this platform is becoming increasingly important.
With earnings from person-to-person (P2P) SMS messaging steadily declining due to it now generally being commoditised and with chat apps as preferred messaging channels, application-to-person (A2P) traffic has become the major revenue spinner across the SMS channel.
Yet, network operators often struggle to fully monetise their A2P pathways, as messaging providers often exploit network vulnerabilities to send business messaging via grey routes, which are essentially low-paying or unbilled pathways. The result is that little or no revenue is generated by this traffic and the scale of this leakage poses a real financial risk to operators.
A report published by Mobile squared found that between 2018-2023 grey routes are expected to cost the mobile network operators almost US$50 billion. Additionally, market education is required with 60% of mobile network operators having not yet sufficiently protected their network from grey-routes and other A2P fraud by investing in fraud prevention solutions such as firewalls.
SMS firewalls are monitoring and filtering solutions that are specifically designed to detect and block unauthorised A2P SMS traffic on a network. They do this by monitoring incoming messages and – based on aspects such as the originating network, number, hashing and message content – block and filter the ones not sent through a properly billed route.
Monetise legitimate traffic
In the case of improperly billed legitimate A2P messages, once these have been blocked by the firewall, attempts can be made to monetise this traffic. After detecting that an aggregator is sending business messaging via an improper route, the firewall administrator or solution providers should contact them to reroute this traffic to a properly billed pathway at the applicable pricing.
However, an SMS firewall is a complex system that is expensive to develop, and which incorporates Machine Learning (ML) to automate the discovery of fraudulent or unauthorised messages based on keywords, text patterns and even spelling. ML has been found to be more efficient than a human-operated monitoring system and can continuously learn and develop new algorithms and build up a database of elements to look out for.
Most network operators simply lack the skills and resources to develop their own SMS firewalls, as it requires a lot of development and advanced engineering. It also requires the human factor in the form of experts who have in-depth knowledge of global markets and pricing, as well as the ability to identify and calculate the proper pricing for specific routes, countries and messages.
Some large network operators do have their own firewall solutions but are discovering that it is a better value proposition to outsource SMS firewall provision to a specialised vendor due to its complexity and the need to reduce costs. A messaging solutions provider can not only develop but also maintain the firewall, which needs to evolve and keep pace with the ever-changing threat landscape.
The complexity of SMS firewall development and implementation is greater for big operators and especially for those that operate in countries with huge subscriber bases, such as in the African region. These MNOs typically handle massive volumes of SMS traffic and need to address a lot of unauthorised messaging on their networks. As a result, they typically receive large amounts of complaints from unhappy customers who are regularly exposed to spam and other potentially harmfully SMSes.
An effective firewall solution will cover all the termination points on an operator’s network and the solution provider will implement rules that govern how unauthorised traffic is blocked. Once advanced pricing strategies are implemented, the technology partner should guide the MNO as to how best to monetise traffic on the network.
A specialised vendor can bring broad expertise, agility and global knowledge and coverage to the table, as well as the ability to constantly look for new approaches for better monetisation of A2P SMS routes. MNOs should look for a partner that will understand their needs, which is key for successful technology implementation. However, this partnership should stretch beyond technology, enabling the partners to share business insights and develop new services much faster.