Carriers missing out on $15bn of revenue due to grey routes fraud

Grey routes fraud could be costing mobile operators more than half of their potential revenue from business-led Application to Person (A2P) SMS traffic, a specialist group has claimed.

A2P SMS specialists Dialogue Communications claim shutting loopholes around A2P could generate as much as $15 billion in operator revenue next year.

SMS aggregators, who send messages to users on behalf of companies such as banks and delivery firms, use so-called “grey routes” to avoid network operator charges for the service.

Dialogue CEO Hugh Spear told an industry roundtable in London: “There are some firms out there that are effectively not only cheating the operators but also cheating their customers.

“Taking the grey route to by-pass operator charges increases the chance of non-delivery, provides a safe, profitable haven for the spammers, and risks damaging brand reputation both for the brands associated with the messages and the operators themselves.”

Dialogue established its figures based on tests it carried out on 199 mobile networks in 84 countries earlier this year, finding that just 23% showed no A2P SMS by-pass activity. More than half (51%) had significant network by-pass activity, with 28 operators recording 100% by-pass of messages.

Earlier this year, it deployed its Sentinel technology in four territories, with operators reporting a sharp increase in revenue from A2P services. One operator, who was not named, is now generating more than $500,000 per month in additional revenue.