Majority of mobile network operators unprepared for A2P monetization
Latest market research by mobilesquared and sponsored by tyntec, finds that 75% of mobile network operators (MNOs) do not have the measures in place to control and monetise Application-to-Person (A2P) SMS traffic that traverses their network. Although the majority of surveyed MNOs indicated their year-on-year A2P SMS traffic grew between 6% and 36%, less than 25% of MNOs have actually deployed or updated an SMS firewall since 2012.
Firewalls that were installed before 2012 are unable to provide the message visibility needed to detect and control grey routes and other security threats. Therefore, having a properly managed next-generation firewall in place is a prerequisite for MNOs to be able to block security threats, and identify legitimate traffic which can be monetised. The potential of this overlooked revenue opportunity is apparent considering that 56% of survey respondents have experienced A2P messaging traffic growth in the last 12 months, compared to 49% over the prior 12 months.
Key findings of mobilesquared’s 2015 research report “Secure Networks Key to A2P Monetisation” include:
– Less than 25% of MNOs have deployed or updated an SMS firewall since 2012.
– Two-thirds of MNOs using SMS firewalls reported a huge reduction in unauthorised messaging traffic.
– Grey routes account for two-thirds of A2P SMS traffic, meaning currently only one-third of A2P traffic can be monetised by MNOs.
– Spamming is considered the greatest network threat, followed by spoofing (messages sent illegally by simulating a roaming subscriber), and virus distribution (messages luring subscribers to a download site with viruses).
– Most popular near-term monetisation strategies are domestic and international A2P SMS, followed by portability and phone verification information, Internet of Things (IoT) and machine to machine (M2M), and lastly A2P messaging via CSP-owned OTT apps.
The A2P SMS market is growing fast, with analyst firm Ovum estimating that A2P SMS accounted for 24% of total messaging traffic in 2014. It is estimated that A2P traffic will grow to 2.21 trillion messages in 2017, by which point it will represent 31.3% of total messaging traffic. In spite of the growth of the A2P SMS market, MNOs are in protection mode. Mobilesquared’s 2015 research reveals MNOs associate the rise of A2P SMS with increased spam and illegal messaging attacks on subscribers via their networks. They don’t, however, have the sufficient network security tools in place to control and manage this and as a result, are also losing out on monetisation opportunities.
SMS firewalls connect the dots between network security and A2P monetisation
“SMS firewalls pave the way for clean and legitimate A2P messaging growth. Through using an effective, properly managed SMS firewall, MNOs can gain control over their A2P traffic, and open up their secured networks to legitimate A2P use cases, providing them with a termination fee for each message delivered to their subscribers,” said Stefan Kuehne, the director of carrier management at tyntec.
Nick Lane, chief insight analyst at mobilesquared, added: “The A2P SMS revenue generating potential for mobile operators is effectively the eighth wonder of the world – at least in the wireless space. Mobile operators have been scouring the landscape to find ways of getting in on the OTT communications act, but with next-generation SMS firewall solution, they can access the even greater enterprise messaging traffic opportunity.”