Bangladeshi mobile operator Grameenphone has announced that 365Squared, a Malta-based company that specializes in revenue protection and fraud management for MNOs, will manage A2P (application-to-person) traffic on the operator’s network. Through an SMS filtering system, this solution will address the problems that users and MNOs encounter from messages that are delivered through “gray routes.” An A2P message delivered via a gray-route connection originates from a source outside of the operator’s own network, typically using a channel ordinarily reserved for carrying P2P (person-to-person) communications. P2P connections, which carry no fee, are extremely profitable for the third party sending an A2P. This is because they charge a transaction fee for each message they deliver to their customers without being charged anything from the recipient operator. Operators’ reputations become tarnished when subscribers receive large volumes of spam or potential security threats via SMS.
Although Bangladesh is one of the poorest countries in the world, it has an extremely high mobile penetration rate—74 percent overall, almost 100 percent in urban areas and above average in the country’s rural regions when compared to other developing nations. Its mobile market continues to grow as users further adopt mobile banking and m-commerce. Correspondingly, growth in mobile payments and mobile banking, and increasing mobile marketing activities are driving the growth of the A2P SMS market. In 2013, the Asia-Pacific region held the largest share (42.2 percent) of this market, which at that time was valued at US $53 billion. As the fees associated with A2P messages are a source of revenue for operators, it is clear that Grameenphone, the largest of Bangladesh’s six MNOs, would not want to jeopardize this revenue stream, which could be reduced if subscribers who receive spam and other SMS that raise concerns about customer privacy and security switch to other providers. Additionally, without a secure message delivery system, Grameenphone is likely not receiving the associated fees it should receive from the A2P messages sent to its subscribers, because of third parties sending them via a P2P route. We would not be surprised to see other operators that receive revenue from fees generated by A2P messages partner with companies that can offer a secure solution for delivery of A2P SMS to customers, or else devise solutions of their own.