Chapter 2| Flat Pricing Structures and Price Increases
In many ways, these two issues are part of the root cause of the increase in grey route traffic.
Again, we will address solutions to these lower down, but for now what has led us to this point and why does it create problems.
Let’s start with flat pricing. Many MNOs these days effectively give SMS messaging away free to customers with all-you-can-eat bundles. Unlimited SMS’s – or at least hugely generous allowances – are common across most countries or operating territories. But that has, of course, given the opportunity for nefarious players to take advantage of these bundles, forming grey farms where P2P SMS channels can be used for A2P with tiny costs. These low costs enable savings to be passed onto brands wanting to use A2P, and cheaper prices attract more business – leading to huge volumes of grey traffic. It harms both MNO and their preferred aggregator partners.
Secondly, price increases. Operators, trying to increase revenue from A2P SMS, have typically fallen back on the easiest option – increasing the price they charge brands to send A2P.
But as we’ve just referenced above, with P2P messages offering massive discounts to legitimate A2P messaging costs, asking brands to pay more for each message they send can just drive them to the underground grey route instead. While it might be tempting to simply hike up A2P prices, it’s at best a short term strategy and in reality, long-term, it’s going to seriously impact legitimate A2P volumes.
In the next chapter we look at threats and importantly, the opportunities OTT present A2P SMS.
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