Operators could generate as much as $15 billion in additional revenue next year by addressing the shady use of “grey routes” in business-led Application to Person SMS traffic, according to A2P specialists Dialogue.

According to a new study led by the firm on 199 mobile networks in 84 countries, more than “half of the world’s mobile operators” are losing out on this potential revenue, with some of the biggest brands using grey routes to avoid network operator charges.

Dialogue said many large enterprise customers, ranging from banks, delivery firms, brands running competitions, travel and leisure companies, deploy SMS aggregators to bypass traditional routes, thus creating a revenue black hole for operators, which are failing to identify and shutdown such loopholes in their network.

These aggregators then make increased margins from companies which believe they are paying a fair price.

Dialogue, which has deployed its Sentinel technology to help overcome the issue, said its tests found only 23 per cent of networks showed no A2P SMS bypass activity, while 51 per cent encountered the problem in more than half of all messages, and 28 operators’ traffic was 100 per cent affected.

The company further backed up their findings with evidence from industry body GSMA, which found partial or full grey routing on 75 per cent of 816 operator networks surveyed, including 271 “of the largest and most influential”.

“Cheating”
Speaking at a roundtable in London, Hugh Spear, CEO and founder of Dialogue, hit out at some firms that were not only “cheating operators”, but also their customers in terms of messaging quality.

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

In the briefing, Spear added Dialogue sees itself as unique in the market, which means it’s not an aggregator, nor does it look for ways to reduce cost through grey routing, but instead seeks to “safely” deliver 100 per cent of A2P SMS traffic on net, while ensuring a spare split of revenue for operators.

“Research from multiple sources shows that the A2P SMS market will be worth more than $55 billion this year, growing to an estimated $70 billion by 2020,” said Spear. “We believe that operators should have, at the very least, half of that revenue as the carrier of the service.”