The A2P market has soared in value in recent years – with the pandemic bolstering its position as the shining light of the business messaging landscape.

Yet many Mobile Network Operators – left blindsided by its success – are losing billions of dollars in revenue leakage through their failure to capture true business value from this vital channel.

We explain why – without a next-generation firewall to enable MNOs full visibility and control over their network – MNO’s will always struggle to effectively monetize their A2P traffic, and potentially worse – could undermine the value of this channel.

Amidst the volatility of the pandemic – with the expedited digital transformation and expansion of e-commerce it caused – the secure reputation of SMS helped send A2P’s business value soaring.

The use cases A2P powered helped keep communities safe, economies running and protected people’s assets.

A2P was the channel of choice for the world’s ARN (alert, reminder and notification) messages from worldwide healthcare authorities delivering Covid-19 advice and vaccine information.

A2P ensured banks could secure their customers transactions through 2FA, while
millions of businesses – from tech giants to airlines to e-commerce sites – came to rely on SMS-enabled A2P and P2A messaging as the key to delivering a deeper customer connection and response in the changed digital environment.

So there is little doubt that the Global A2P market – valued at $59.1bn at the start of the pandemic and set to reach $74.7bn by 2026 – is thriving.

The reasons for this growth are simple – SMS is, uniquely, deliverable to all mobile phone users. Additionally, as well as its historical reputation for being secure, A2P is renowned for delivering high levels of customer engagement.

Yet while businesses immediately saw the value in A2P messaging and adopted it en-mass, ironically the one industry that ought to have benefitting the most from this shift, has largely failed to: Mobile Network Operators.

The reasons for this are complex – in part a result of historically complicated management processes, but in part also because A2P has sat as a sleeping giant in operators revenue streams.

However with such an opportunity for increased revenue now at hand, and with technological changes meaning securing this revenue has never been easier, MNO’s across the world are now beginning to take note of this undervalued channel.

So how can it be done? At Haud, we believe the solution lies in PACE – Protect, Action, Create and Execute.

This article examines the first part – Protect.

Protect starts with visibility, yet almost a third of MNOs are still leaving SMS traffic unpoliced by not investing in a messaging fraud detection solution able to guard against direct intrusions and mislabeled messages.

Without the bedrock of a next generation managed SMS firewall – giving both full visibility and full categorization over the ATP and RCS traffic passing through their airwaves – operators cannot properly monetise business messaging.

As HAUD Head of Global Market Intelligence, Joanna Kuligowska explained on a recent webinar, poorly-protected networks imperil A2P’s secure reputation by facilitating a rise in Sim Farms (computer-based systems with multiple SIM cards to send large volumes of fraudulent SMS along illegitimate grey routes).

Bad actors can flood the network with spam, malware and phishing messages, inflating messaging volumes and contributing to congestion and quality of service issues.

Kuligowska said: “Increased latency then leads to a poor user experience for subscribers, while end users are left frighteningly exposed to liability, harming both the reputation of the MNO and that of SMS as a trustworthy channel.

“Meanwhile, MNOs are left unable to identify and stop staggering levels of revenue leakage, – missing out on termination fees for vast numbers of messages delivered to subscribers.”

Recent figures have shown that this revenue leakage – from messages delivered over grey routes and through Sim Box activity- almost doubled in the pandemic. Estimated lost revenue hit an astonishing $13.5 billion in 2020 (up from $7.6 billion in 2019).

This sum, if divided between every MNO, would mean additional annual revenue of $18 million each.  Based on the 750 MNO worldwide registered with the Global System for Mobile Communications (GSMA)

And then there is the millions in revenue that currently passes to A2P aggregators – money that could boost cellular carriers profits if they took control of monetising their airwaves themselves.

Research by HAUD shows many MNOs are missing out on as much as 50% of the revenue they are entitled to from international A2P, for example.
HAUD’s Kuligowska added: “Although many MNOs use firewalls, they are frequently poorly managed and not optimised to detect either the latest threats or grey traffic.

“Only once MNOs have 360 degree visibility of the messages flowing across their network in real time – as a transparent, single source of truth – can they take action to secure and grow their operations in a sustainable way.”

Kuligowska added that the best option for most MNOs is to use partners – like leading firewall provider HAUD.

She said: “This is because true visibility means continuous analysis by the best people – who can also test your network for vulnerabilities.

“Organisations like HAUD are experts at gathering global market intelligence and then using these insights to keep MNOs firewalls ahead of the curve.

“Messaging routes and sources are monitored, categorised and filtered to minimise spam and ensure all the messages MNOs carry are being paid for accordingly.”

The first step to A2P messaging success is properly-protected MNO networks.

Find out more about MRO and HAUD’s suite of tools to enable A2P revenues, enforce network protection and grow market share here or visit our contact page here.