Grey route traffic is the biggest cause of lost revenue in the A2P messaging sector.

Some estimates suggest up to 45% of all A2P messaging is being sent via these routes, with MNO’s missing out on billions of dollars in revenue.

Further on in this guide we will come to solutions to address this issue, but for now it is important to state the reasons for the growth in grey route traffic, and also its impact.

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.

Over-the-top messaging services – Whatsapp, WeChat etc – are clearly incredibly popular with consumers. Although their initial growth was spurred on by cost-effectiveness – messages are, of course, largely free to send with an internet connection – their popularity also stems from aspects like security, anonymity, group creation and connectivity, multimedia messaging simplicity and fantastic UX.

Overall what we are seeing, then, is an industry vertical facing a pivotal moment. If, together, those with an interest in securing a lucrative future for SMS A2P take action now, then the opportunity to 10X revenues from the channel are certainly there.

But if collectively we don’t, then this could be the start of a terminal decline and a huge missed opportunity for network operators.

The idea behind Messaging Revenue Optimisation is simple – the application somewhat harder – yet delivering this strategy is something do-able by every MNO we work with.

At its core it combines two key elements – Revenue Defence and Revenue Creation – coupled with the human expertise needed to monitor the traffic data, analyse it, action the insights generated, and deliver the two programs.

Let’s start with revenue defence – as visibility and control are the key to the delivery of the overall strategy and are the logistical first step given what we just said about latest technology firewalls.

We’re referenced this already, but deploying a next generation, managed, firewall ought to be the first step for any MNO looking to deploy a messaging revenue optimisation strategy.

Revenue Creation is really about a couple of things. Firstly, ensuring you maximise the true market value of the messages you help deliver to end users, and that you utilise a mix of operational and strategic levers to achieve this.

Secondly, it’s about having the capability to invent new business models, build additional relationships, and yet ensure you don’t cannibalize existing revenue streams too heavily.

As we said at the outset of this ebook, the intention is to share what we at HAUD believe is the best strategy on the market for MNO’s to optimise their revenue from A2P messaging.

It’s an opportunity MNO’s have to both secure existing revenue in greater quantities, and to build a future-proof A2P monetization strategy that both drives up recurring revenues while protecting this industry vertical and the end users.