SMS vs OTT: has the match really started?

SMS is a $100+ billion business - Messaging is the biggest 'non voice' mobile service and it is growing. SMS accounts for almost half of the revenues generated by mobile messaging: it is a $100+ billion business for at least the next 3 years according to Portio Research. We now have 6.9 billion mobile subscriptions worldwide. The OTT messaging platforms, put all together, have a consolidated base of 2.3 billion users. WhatsApp, which is a massive success story, has “only” 450 million users!

SMS vs OTT: has the match really started?

SMS is a $100+ billion business - Messaging is the biggest 'non voice' mobile service and it is growing. SMS accounts for almost half of the revenues generated by mobile messaging: it is a $100+ billion business for at least the next 3 years according to Portio Research. We now have 6.9 billion mobile subscriptions worldwide. The OTT messaging platforms, put all together, have a consolidated base of 2.3 billion users. WhatsApp, which is a massive success story, has “only” 450 million users!

SMS termination revenues are high - When wholesale revenues derived from voice termination keep on decreasing, SMS termination revenues remain high: the average SMS termination rate in Europe is €2.8 cents per terminated SMS; up to €7 cents per SMS for international SMS in some countries.

But the SS7 network is not so safe anymore - When used solely by trusted members, this network used to be a safe area. Nowadays many new players have an easy access to SS7 (MVNO, Hub providers, SMS aggregators, HLR lookup service providers...) while fraudsters / hackers have found new ways to get access to this network.

Conclusion: SMS termination should now be carefully monitored to tackle fraud and revenue assurance issues.

Why Araxxe managed services can help you maximizing your SMS termination revenues?

We design specific test campaigns focusing on the detection of the main fraud schemes (e.g. SIM box, SMS faking, SMS spoofing...) and revenue assurance issues (e.g. unbilled incoming SMS, wholesale arbitrage...).
You take advantage of Araxxe global test platform in 160+ countries: our international network of robots and our large portfolio of international telecom subscriptions.
We operate -on your behalf- test campaigns delivered in an industrialized way.
We deliver actionable reports enabling to quickly fix revenue leakages.
You leverage Araxxe unique expertise in test campaign design, interconnect fraud detection and revenue assurance.

How do you effectively tackle bypass fraud today?

Bypass fraud is still a major concern for mobile operators worldwide. Far from having disappeared, fraudsters have developed new techniques to protect their 'business'. They have implemented tactical responses against the main detection methods: (a) Profiling analysis performed in Fraud Management System, (b) Tracking campaigns based on Test Call Generation.

How do you effectively tackle bypass fraud today?

Bypass fraud is still a major concern for mobile operators worldwide. Far from having disappeared, fraudsters have developed new techniques to protect their 'business'. They have implemented tactical responses against the main detection methods: (a) Profiling analysis performed in Fraud Management System, (b) Tracking campaigns based on Test Call Generation.

Are you aware that the traditional Profiling thresholds are now seriously challenged by fraudsters?

Fraudsters are able to simulate human behaviour by using the SIM server technology and the advanced features of last generation SIM boxes: automated data transactions, automated calls to the voicemail, incoming call redirection to a human operator... This additional noise generated on top of the fraudulent traffic makes the profiling a much more difficult task.
In some countries, fraudsters simply lend SIM cards to genuine subscribers and are able to mix fraudulent and legitimate traffic by sharing the usage of these lines. They also sometimes directly clone the SIM cards of genuine subscribers.

Do you know that some fraudsters are able to counter-detect and block your Tracking campaign?

Basic Tracking campaigns, mainly based on a high volume of test calls, are no more efficient as fraudsters can now manage 'black-lists' and block the traffic to the test numbers of the Tracking campaign. Test numbers are black listed on the basis of well-known indicators: number of call attempts during a specific timeframe, number of short connects during a specific timeframe...
Reversely, other fraudsters manage 'white lists': they implement routing policies enabling them to route traffic through a SIM box only if the called number has been previously white listed; otherwise the traffic is routed through white routes.

So have the fraudsters won this war?
Definitely, the answer is NO!

First, because the techniques / technologies used by fraudsters are well-known by fraud experts; so it is possible to act accordingly.
Second, many operators have already successfully implemented best practices, such as: combine the main detection methods, keep aware of new trends and be as flexible as fraudsters, always challenge your existing solution and map it against up-to-date risks.

Why Araxxe is the right partner to help you optimize your bypass detection process?

We design advanced test campaigns optimizing bypass detection performance while addressing the risk of counter-detection.
You take advantage of Araxxe global test platform, including a large portfolio of routes and international telecom subscriptions.
We operate flexible test campaigns delivered in an industrialized way and optimized on a daily basis by Araxxe fraud analysts.
We team with you to further integrate all your bypass detection solutions in order to create new synergies out of them.
You leverage Araxxe unique expertise in both test campaign design and bypass fraud detection.

The debate about SMS death has never stopped over the last years. If on the one hand there are factual reasons to expect SMS decline, on the other hand the facts are obstinate: SMS is still going strong!

Do you know that SMS is still growing in most of the countries worldwide? The smartphone penetration and the growing usage of OTT apps definitely have a negative impact on SMS messaging, especially on Texting (person-to-person SMS). But a recent Portio Research study shows that SMS volumes are growing nearly everywhere.

The debate about SMS death has never stopped over the last years. If on the one hand there are factual reasons to expect SMS decline, on the other hand the facts are obstinate: SMS is still going strong!

Do you know that SMS is still growing in most of the countries worldwide? The smartphone penetration and the growing usage of OTT apps definitely have a negative impact on SMS messaging, especially on Texting (person-to-person SMS). But a recent Portio Research study shows that SMS volumes are growing nearly everywhere.
Are you aware that application-to-person SMS is now booming? Application-to-person SMS and person-to-application SMS are increasing their share of the SMS market due to increased usage of financial services and advertising. According to Juniper Research, Application-to-person SMS market will overtake Texting and will be worth 70.1 USD billion by 2016.
Do you know that in some countries SMS termination revenues are higher than voice termination revenues? SMS termination remains a key part of mobile operator revenues. In 2012 in France, SMS termination revenues accounted for 1.5 € billion, more than voice termination (1.4 € billion). SMS termination rates are still very high: the average SMS termination rate in Europe is 2.87€ cents per terminated SMS (up to 7€ cents per SMS for international SMS in some countries).
It is clear that SMS termination should now be monitored as carefully as voice termination.

WHY ARAXXE IS THE RIGHT PARTY TO HELP YOU MAXIMIZING YOUR SMS TERMINATION REVENUES?

Araxxe can help you monitoring the main risks on SMS termination revenues.
This covers both fraud schemes (such as SMS SIM box, SMS faking, SMS spoofing...) and revenue assurance issues (such as Arbitrage or SMS smuggling).
Araxxe is the only solution provider offering an approach focused on securing SMS termination revenues.
Reporting speed is key to discourage fraudsters being active in your network. Araxxe offers you the fastest and most flexible reporting engine available in the market.
Most operators and vendors have successfully tackled the issue of protecting mobile networks against SPAM. Araxxe solution goes beyond that and addresses the issue of making sure you charge correctly for the legitimate SMS that reach your network.