Technological and social changes have evolved the wholesale industry over the past decade. Mobile Network Operators (MNOs) have experienced decreased profits from international long distance (ILD) decreases from corporate users. At the same time, SMS A2P traffic is growing annually during a time when the SMS value proposition was thought to be diminished. Instead, SMS continues to be a competitive and lucrative business solution. While SMS continues to expand its reach, MNOs are beginning to face similar monetisation problems which impacted ILD business. The most critical of these challenges is fraud management.
External individuals or organisations may attempt to defraud your MNO. Whenever an A2P SMS is sent to an MNO’s active network, the MNO charges a termination fee, supporting their revenue stream through SMS termination. This fee is often bypassed by individuals or companies using A2P SMS, taking advantage of existing exploits within the payment structure of your A2P SMS strategy. This is typically accomplished by bypassing official termination fees using one of several methods and exploiting an MNO’s system to avoid payment.
Protecting your SMS monetisation strategy is critical to ensuring that your company’s resources are not at risk of fraud or theft. Knowing how to recognise these problems and what to do about them can help mitigate risk and cultivate a successful SMS strategy. Here are five steps that are necessary to guarantee that your SMS monetisation strategy is effective while protecting your MNO’s revenue:
1. Stay informed about your business environment
In evaluating your SMS monetisation model, it is important to consider where your MNO is operating and what local laws or provisions local and national government(s) may have for addressing fraud. Your company should understand the legal rights end-users have, what rights your company has for reporting irregular termination, and what legal recourse your company has in response to fraud committed by end-users. Additionally, you should be familiar with local commercial laws surrounding A2P SMS businesses and how termination models are structured. Are you able to define your fees? Are there limits placed on SMS monetisation by local or national law? Who can participate in the market, and how can they reach your network?
2. Monitor the level of network leakage you are experiencing
To properly understand the level of leakage your company is facing, it is essential to have an exact understanding of the size of termination rates and to what extent terminations are fraudulent. If your MNO is maintaining a network without sufficient protection, grey routes may be used representing a financial risk for the operator and a data privacy risk for the subscriber. Addressing these instabilities or inadequacies in the network may require a lot of work, but the result can be very valuable. For this reason, proper testing is essential to solving critical leakage. Implementing proper Network Penetration Testing (NPT) can help remedy network leakage and protect your company and consumers.
3. Mitigate risks posed by SS7 routes
A significant amount of SMS traffic is likely terminated by SS7 routes. This termination can occur without any notice and can be detrimental to successful monetisation. Deploying an SS7 firewall or allowing only SMPP connections can allow more control over potential termination by SS7 routes.
4. Prevent attacks by SIM boxes
Protecting against organized attacks on SIM boxes is likely the most difficult step in this process. SIM boxes are more sophisticated than they have ever been, and fraudsters continue to exploit existing network vulnerabilities by using them. Those trying to defraud your company may use SIM boxes to simulate typical human behaviour and bypassing less robust anti-fraud measures. An MNO should focus their efforts on maintaining a robust SMS firewall. The firewall should be set up correctly and have the proper resources to maintain and manage the firewall and related systems. It is critical that an MNO is aware of existing SIM box vulnerabilities and fixes them immediately. These measures will protect both users and the overall revenue from the MNO’s SMS monetisation. Without good firewall management and a quality firewall system, protecting your MNO from fraud will be a more difficult process.
5. Adapt your business model to meet demands
After repairing any illegitimate or ‘grey’ routes that were leaking revenue, it is time to consider adjusting your broader business model. You should adjust your business model in accordance with the services you provide to consumers and partners. Your business model should guarantee the quality and efficiency of your SMS systems and ensure to the rest of the market that your business’s value proposition is stable. By restructuring your business model and ensuring that your networks and external routes are protected, you can ensure that other enterprises and market players can trust that their money is working for them by investing in the A2P channel. This way, you will maintain control over your business and critical relationships.
SMS A2P is a trustworthy channel that provides value to MNO’s and end-users alike. These channels can be at risk for fraud if they are not properly maintained or if ‘grey’ routes are allowed to continue. Global Telco Consult (GTC) is here to assist with managing these channels and maintaining the exceptional value of A2P. If you are interested in monetizing your A2P business, or have questions about A2P SMS monetisation, contact us via our website for more information.
Global Telco Consult (GTC) is a trusted independent business messaging consultancy with deep domain knowledge in application-to-person (A2P) services. GTC provides tailor-made messaging strategies to enterprises, messaging service providers, operators and voice carriers. We have expertise in multiple messaging channels such as RCS, Viber, WhatsApp, Telegram and SMS for the wholesale and retail industry.
GTC supports its customers from market strategy through service launch, running the operations and supporting sales and procurement. The company started in 2016 with a mission to guide operators and telcos to embrace new and exciting opportunities and make the most out of business messaging. For more information or industry insights, browse through our blog page or follow us on LinkedIn.