| SMS

What is grey routing?Why should buyers of business SMS care?

Contents page:

Who knows? ................................................................................................................................................................ pg.03

What is it? .................................................................................................................................................................... pg.04

Is it illegal? .......................................................................................................................................................... pg.04

About aggregators and MVNOs ..................................................................................................................... pg.05

Why do the networks care? ............................................................................................................................. pg.07

Why should you care? ............................................................................................................................................. pg.08

Networkaction .................................................................................................................................................. pg.09

What the networks are looking for ............................................................................................................... pg.10

How can you tell if your messages are being grey routed? ............................................................................ pg.11

Attitudes to grey routing by country ................................................................................................................... pg.12

2

What is grey routing?

Who knows?

3

What is grey routing?

Iwasn’tfamiliarwiththeterm‘greyrouting’beforeenteringthetelecommunicationsindustry;asa

marketingmanagerinchargeofpurchasingSMStosendpromotionalmessages,Iwaslookingfora

professionallookingwebsite,aneasytousewebplatform,andacheapprice.

ItturnsoutthatI’mfarfromalone.WeconductedasurveyofvisitorstotheEsendexbrochuresites,1 and

asked them:

Do you know what is meant by ‘grey routing’?

VisitorstotheEsendexwebsiteareusuallytheretoresearchSMSproviders,orpurchaseSMS,andyet

thisdataillustratesthatmostarenotawareofacriticalqualitydistinctionthatexistsbetweenoneservice

providerandthenext.Theironlypointofdifferentiationisprice.

UK France Australia

Spain Germany

1. Survey ran on brochure sites from 08/12/16 until 05/01/17

OK, so what is grey routing?

It’sthepracticeofexploitingamobilephonenetworkvulnerabilitywhichallowsSMStraffictotravelfor

freebetweeninternationaloperators.YourmessagecouldoriginateintheUK,andbeintendedforaUK

handset,butbytransmittingviaselectedinternationalnetworks,itcantravelaroundtheworld,andcome

backtobedeliveredtotheUKnetworksatverylittlecost.

Sounds great - what’s the problem? Is it illegal?

Technically,no.Roamingconnectionsdesignedtoallowindividualstocontinuetousetheirphoneswhile

travelling abroad exist between almost every country on earth.

Wherethere’sarelativelylargeamountofmessagespassingbackandforthbetweentwocountries,the

network operators will come to an ‘wholesale roaming agreement’ so there’s transparency over the volume

ofmessagesbeinghandled,andeverypartycanbeproperlycompensatedforhandlingthem.

4

What is grey routing?

messageReceived message

Visitedoperator transit services

Homeoperator

Receiver’shome operator

However,ifthereisn’tagreatdealoftrafficbetweentwocountries,thisagreementmaynotexist.Inthat

scenario,aroamingconnectionallowsthemessagesandcallstopassfromoneoperatortotheotherbut

withoutmoneychanginghands.Theinternationalgatewayexchangemechanismiscompletelybypassed.

Ifthemessagevolumestayslow,andlimitedtoperson-to-person(P2P)traffic,noharm,nofoul.

However,thereislittletopreventanaggregatorexploitingthisloopholetosendhighvolumesofbusiness

trafficforverylowcost.

About aggregators and MVNOs

Inmostcountriesthereareahandfulofmobilenetworkoperators(MNOs-alsovariouslyknownashost

networksandmobilecarriers)-intheUK,theyareEE,O2,ThreeandVodafone-andanumberofvirtual

networkoperators,orMVNOs,whowillhavetheirownvaluepropositionforcustomers,butultimately

send their messages via the host networks.

Giffgaff,TescoMobile,TalkTalkandVirginMobileareallMVNOs.

5

What is grey routing?

TheGSMAestimatesthattherewere1,017 MVNOsactiveinJune2015.2Theyprovidemuch-needed

competitioninthemarketplace,drivingbetterdealsforcustomers.

An aggregatoractsasamiddlemanbetweensmallerMVNOsandcompanieswhoofferbusinessSMS

services,andthehostnetworks.

Theyexistbecause,asarule,thehostnetworksprefertohaveafewcompaniessendinglargeamountsof

SMStraffictothem,asopposedtomanycompaniessendingsmallervolumesoftraffic.Aggregatorsfulfil

thiswishbycombiningthetrafficfrommultiplecompanies.

Inaddition,aggregatorsareoftenabletonegotiateabetterpricewiththehostnetwork,soitcanbeless

expensive to send messages through an aggregator.

However,iftheMVNOorserviceprovidergeneratessufficientmessagevolume,theywillbeableto

transmittheirmessagesdirectlyviathehostnetworks,andthesearecalled‘directconnections’.

Still not seeing the issue here…

Host networks do not want business SMS traffic(knownasApplicationtoPerson,orA2P)toberouted

throughcountrieswherethereisnowholesaleroamingagreement,astheywon’tbeproperlycompensated

for delivering the message to the recipient’s handset.

Hostnetworkshavespecificroutessetupforbusinesstraffic,andtheywantallbusinesstraffictoflow

throughtheseroutes,notonlysothattheyarepaidforthemessages,butalsosothattheycanprotect

customersagainstpoorservice(moreaboutthatlater)andspam.

Butnotwantingthistohappenisnotthesameasnotallowingit.Thepracticeofwhathascometobe

knownas‘greyrouting’isrife,asthesequotesillustrate:

6

What is grey routing? 2. www.fiercewireless.com

Thebusinesseswhosetrafficisbeingsentdowngreyroutesquiteprobablyhavenoidea.Therearetell-

talesigns,butasoursurveyshowed,mostpeopledon’tknowenoughabouttheissueinordertolookfor

evidence of grey routes.

YoucanpayforyourSMStobesent,andthatpricemightcoversendingthemessagethroughaspecified,

monetised,businessroute.Butanunscrupulousaggregatorcouldbere-routingyourmessagesthrough

inexpensivegreyroutesnotintendedforbusinesstraffic,andretainingtheextraprofit.

7

What is grey routing?

The combined amount of industry revenue leakage related to grey route messaging could reach as high as $82.14 billion by 2020.3

“One aggregator has an agreement to send 300 million A2P messages a month via a small operator in the Caribbean,”4

PaulGarner,globaldirectorofsalesforDialogue

3. Mobilesquared

4. www.globaltelecomsbusiness.com

Aslongasmostofyourmessagesgetdelivered,andyou’renotactuallybreakingthelaw,whyshouldyoucarewhatroutesyourmessage gets sent down?

It depends how much you care about the following:

Seriously, who cares?

The speed at which your messages are delivered

The reliability that the message will be delivered

The security of the message and the personal details of the customers you’re

contacting

All of these things are compromised when your messages are transmittedviagreyroutes,becausethemessagesarebouncedaroundseveralhostnetworksinseveralcountries,andloseanydataprotectionordeliveryguaranteesintheprocess.

What’s more, it’s possible that your messages may be stopped altogether.

Thenetworksaretakingaction

InJanuary2017,15%ofhostnetworkswereutilisingsolutionstopreventgreyroutingmessagingfraud(by

whichtheymean,businessSMSthat’snotgoingthroughanintendedbusinessroute,andspam).By2020,

that number is expected to be 50%.5

Thesesolutionsrangeinprice,complexityandeffectiveness,buttheiraimisthesame:closedowngrey

routesassoonasthey’reidentified.

It’sestimatedthat2.21 trillionA2P(business)messageswillbesenteverydayin2017,representing31.3%

oftotalmessagingtraffic,6soconvertinggreyroutetrafficintowhiteroutetrafficisahighlyprofitable

exercise for the host networks.

9

What is grey routing? 5. iConectiv / Mobilesquared

6. www.mobilesquared.co.uk

P2P:persontoperson,i.e.personalSMSandcalls

A2P:applicationtoperson,i.e.businesscommunication

How can the host networks tell whether a message is from a person or an

application/business?

They’re looking for:

Sender IDs-whereyouchangethesenderfromamobilenumbertoaname.Thisistheclearestindicator

thatthemessagehasbeensentfromabusiness,andshould be going through a route intended for business

messages.

It’s worth noting that when your messages are grey routed, the Sender ID can be changed without you knowing.

Keywords-certain‘sensitive’wordsmaytriggeralerts

Duplicate messages-wherethesamecontentissenttomultiplerecipients.Thisisusuallyamarketing

message(orcouldbespam/phishing);ifit’sgoingdownaroutenotintendedforthesesortsofmessages,

it’s vulnerable to being closed down.

Therearemoresophisticatedalgorithmsinplay,too,butthesearetheobviousredflags.

10

What is grey routing?

Esendex13:34

Text Message

Example of a sender ID.

How can you tell if your messages are being

grey routed?

The most obvious indicator is price. It’s much cheaper to send messages through the routes intended for

personal(P2P)traffic,soifyouhavebeenquotedaverycheapprice,thereisagoodchancethatyour

messages will be grey routed.

How to be sure:

AskyourSMSserviceproviderwhethertheyusegreyroutesatall.Theonlywaytheycanbe100%sureis

byonlyutilisingdirectconnectionswiththehostnetworks.

Iftheyutiliseaggregators,theaggregatormayopttouseagreyroutetotransmitthemessage.

Esendexprefersdirectconnections,butweusetop-tieraggregatorswhereitmakeseconomicalsense.We

consistently monitor their performance to ensure that they are not using grey routes to send our customers’

traffic.

11

What is grey routing?

Esendex Tip Some SMS service providers have direct connections to the

host networks, but choose not to use them in favour of cheaper messages transmitted through grey routes. Don’t assume that because they say they have direct connections, that these are

actually reliably used!

Anotherobviousindicationofagreyrouteisthespeed and reliability of message delivery.

How to be sure:

Testouttheprovider’ssystemandifthereisasignificantdelaybetweenthesendingofyourmessage,and

receipttothehandset,itmaybethattheSMSproviderisusingagreyroute.Ifthemessageisn’tdelivered

atall,that’sanotheralarmbell.

Evendirectconnectionstohostnetworksaresometimessubjecttodelays,though-thinkaboutthe

difficultyofsendingpersonalSMSonNewYear’sEve!

AgainthisissomethingEsendex’sengineersmonitorconstantly,andthey’llre-routetraffictoanotherhost

networkifaparticularnetworkstartstostruggle.Esendexabsorbsanyextracosts,asexpedientdeliveryof

messages is hugely important to our customers.

Attitudes to grey routing by country

WeaskedvisitorstoourwebsitesintheUK,France,AustraliaandSpainwhetherreliableandsecure

deliveryoftheirmessages(A)wasmoreimportantthantheprice(B),andtheresultswere:

Hopefully,havingreadthiswhitepaper,you’renowawarethatthedeliveryofbusinessSMSisfarfroma

levelplayingfield.Asabuyer,youhaveultimatecontroloverwhethertoriskagreyroute,oroptforsureties

overmessagedeliverability,speedandsecurity.

12

What is grey routing?

France Australia SpainUK

A

B

A

B

A

B

A

B

Designed and published by Esendex Ltd. Esendex Limited 2017 | Registered company number: 04217280

About Esendex

Esendex is a mobile business communications provider helping thousands of customers worldwide.

Weoffer1-2-1accountmanagementtohelpyougetthebestoutofyourmarketingcampaigns,

andhavedirectnetworkconnectionstoallofthemajornetworks,meaningthatyourmessages

willbedeliveredquickly,securelyandreliably.

To contact your account manager:

Call 0345 356 5758

Visit www.esendex.co.uk where our agents are available on LiveChat(officehoursonly).