Dialogic Blog

How Getting Rid of Gray Can Keep Mobile Operators in the Black

by Tim Moynihan

Aug 17, 2015 3:06:00 PM

It’s a billion-dollar problem for mobile network operators: blocking gray routes that allow Short Message Service (SMS) fraud to eat up network bandwidth and slow down network performance. And it’s only going to get worse as application-to-person (A2P) SMS traffic increases.A2P SMS is one of the fastest-growing segments in the mobile messaging market, supporting a host of communications that include automated alerts, emails and other text messages generated by commercial mobile applications such as mobile banking apps. Unlike person-to-person (P2P) SMS messages, which are frequently delivered free for mobile network subscribers, commercial entities normally pay a fee for A2P SMS message delivery. But many businesses are bypassing that fee by using gray routes that carry SMS messages over P2P connections, often orchestrated by third-party messaging providers (who charge a lesser fee for their “delivery” services) in a scenario similar to how long-distance toll fraud plays out.

In order to reduce network strain and more efficiently monetize A2P messaging traffic, mobile network operators (MNOs) are turning to security devices such as A2P SMS firewalls to screen, block and protect messaging traffic in their networks. Infobip, a Dialogic partner, is helping MNOs take back control of their networks with their sGate solution. sGate analyzes and filters SS7 signaling traffic to detect and deter fraudulent SMS traffic.

Installing an A2P SMS firewall such as Infobip’s sGate can have an immediate impact on an MNO’s bottom line revenue and network performance. With sGate, MNOs can detect when bulk SMS traffic is entering illegally (e.g., through gray routes) and charge correctly for that traffic or choose to block it. The ability to accurately identify and control SMS traffic also means that MNOs can better control network issues such as congestion, and direct their network resources to revenue-generating traffic.

By 2018, Juniper Research expects the A2P SMS messaging market to approach nearly $60 billion, eventually overtaking person-to-person (P2P) SMS messaging in terms of revenue generation. The complexities of A2P messaging, which include inconsistent policing of mobile apps, particularly in regions such as Eastern Europe and Russia, create myriad opportunities for nefarious parties to commit SMS fraud—and greater difficulties for MNOs to detect and block fraudulent traffic.

But MNOs may have another reason to vigilantly guard their messaging gateways: identity theft. According to security analysts, millions of mobile subscribers will be exposed to fraudulent phishing attempts through SMS texts this year. With the rising popularity of mobile messaging, it was only a matter of time before criminals found a way to exploit the technology to their own benefit. But companies like Infobip are clearly sending their own message that mobile networks are about to get tough on SMS fraud.

Topics: Signaling