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Dialogue Group Reveals More Than 75 Percent of Mobile Networks Are Leaking Revenues by Allowing A2P SMS Bypass

Research from Dialogue Group, the leading provider of Application-to-Person (A2P) SMS has found that 77 per cent of mobile networks are not fully protecting themselves from A2P SMS bypass, which allows SMS messages to be transmitted fraudulently and prevents operator from monetising the booming A2P market.

The A2P SMS market is predicted to grow exponentially, with Transparency Market Research estimating that the market will be worth US$70.32 billion by 2020. However, for the market to reach its potential value, it is critical that mobile operators address A2P SMS bypass to eradicate fraudulent traffic on their network and generate significant revenues by monetising traffic that is currently avoiding the appropriate termination charges.

According to the research, which involved using Dialogue’s Sentinel A2P SMS fraud management system to survey 199 networks in 84 countries, just 23 percent of networks surveyed showed no bypass activity. Worryingly, for 14 percent of networks all traffic was terminated via bypass channels, and 37 percent were found to have significant bypass activity. The remaining 26 percent of networks experienced some bypass.

“Our research confirms that mobile networks are carrying an alarming level of A2P SMS bypass traffic on their networks,” said Pete Neal, Global Director of Products, Dialogue Group. “This not only limits operator revenue streams, but also leaves customers at risk of receiving high levels of spam and brands at risk from damaged customer relationships.”

Dialogue Group investigated the main methods of A2P SMS bypass, finding that grey route activity remains the largest of the four types of bypass by a significant margin, impacting 51 percent of networks surveyed. A2P SMS traffic termination via domestic interconnect links was found to be the next most widespread, with 38 percent of networks identified as receiving A2P traffic from their domestic competitors.

The data also revealed that an emerging threat is aggregator bypass, where aggregator controlled MVNOs who have no termination agreement with the recipient mobile operators transmit traffic via open links to bypass termination charges, which affected 25 percent of networks surveyed. SIM farms and SIM box bypass, which involves an aggregator holding large quantities of SIM cards to send volumes of bulk SMS messages, was detected in 14 percent of networks.

Pete Neal continued, “While progress has been made in monetising A2P traffic and addressing A2P SMS bypass, there remain considerable hurdles to overcome to eradicate this issue. Mobile operators need to not only understand the key issues, but also understand the benefits of addressing them.”

To help mobile networks unlock A2P SMS revenues and to realise the size of the potential global market, Dialogue Group has established three recommendations to tackle A2P SMS bypass:

1. Visibility - Deploy a specialist A2P SMS bypass detection solution to gain full visibility of bypass fraud on the network

2. Security - Secure your network by committing to just 30 minutes of resource per day to use to detect and block A2P SMS bypass traffic

3. Profitability - Implement the right pricing model and maximise revenue from legitimate A2P SMS traffic by working with a trusted partner who is compliant with best practice

Dialogue Group’s white paper on the “State of the Market for A2P SMS Bypass” can be downloaded here .

For more information about Dialogue, please visit the website at www.dialogue.net or follow @dialogue_tweets on Twitter.

Notes to Editors

This A2P bypass survey was conducted early in 2016 and involved the generation of A2P SMS test calls to 199 networks in 84 countries from a range of high profile A2P services. The test calls were captured on the target networks and traced back to determine the origin of the SMS messages terminated on the network.

Contact:

Weber Shandwick for Dialogue Group
Hem Raheja
T +44 (0)20 7067 0712
M +44 (0)7773 617953
dialogue@webershandwick.com

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