Skip to main content

Chief Analyst Nick Lane shares an overview of the latest report from Mobilesquared and MEF examining MNO views on messaging fraud, what it costs them annually and what they are doing to protect their networks and customers.

The fight against messaging fraud is an on-going battle for every mobile network operator (MNO). During H1 2020, Mobilesquared in association with MEF, Anam and Tata Communications, surveyed 66 MNOs on their views on messaging fraud, which revealed that 70% of respondents believe they lost up to 10% of their annual A2P SMS revenues to fraud in 2020, and almost one-fifth of MNOs lost between 15-20%.

This year’s survey findings highlight the damaging impact fraud continues to have on MNO revenues, and the challenge faced in 2021 and beyond.

The survey revealed that 85% of MNOs believe there will always be a level of fraudulent traffic traversing their network even when they have deployed an SMS firewall. That can be explained by the fact that fraudsters are continually probing for potential network weaknesses or vulnerabilities.

  there is an acknowledgement throughout the messaging industry that fraud will never be zero percent of traffic. It is the function of the SMS firewall to identify and prevent these attacks from happening again; it is an ongoing game of cat and mouse.

Perhaps one of the key findings from the survey was that the majority of MNOs believe 5% of fraud is an acceptable level on their network. We do not believe that MNOs are implying that fraud has become acceptable. Far from it. However, there is an acknowledgement throughout the messaging industry that fraud will never be zero percent of traffic. It is the function of the SMS firewall to identify and prevent these attacks from happening again; it is an ongoing game of cat and mouse.

The main point is that there are different fraud types, with some messages considered harmless, like a legitimate marketing message sent via a grey route. Obviously, this is what the 5% acceptance level is being applied to. The problem is that there is always the threat of malicious messages that can give a negative impact or experience to the consumer and permanently damage brand image.

The safest stance for any MNO is to adopt a zero-tolerance policy towards fraudulent traffic and continually strive to attain zero fraudulent traffic over their network.

Ultimately, fraudulent traffic has an impact and a cost regardless of how it is viewed. If we apply the percentage findings from the survey to Mobilesquared market data, it puts a nominal value on what each MNO is knowingly losing each year. For example, we know that the average MNO in Western Europe generated annual A2P SMS revenues of $23.3 million[1] in 2020. Based on the survey findings, 70% of MNOs in Western Europe would have lost up to $2.3 million each, and 20% would have experienced revenue leakage of between $3.5 million to $4.7 million.

It’s time to accept that fraudulent traffic is unacceptable and a zero-tolerance policy has to be the aim for every MNO.

[1] This figure is based on our Global A2P SMS Databook 2019-2024, published October 2020

Nick Lane

Chief Insight Analyst

  

Mobile Operators and A2P SMS:

Tracking the Evolution in Fraud

To ascertain how mobile operators are reacting to the threat posed by fraud, MEF has once again teamed up with Mobilesquared to look at the impact fraudulent A2P SMS traffic had on the business messaging ecosystem in 2020, and how this might affect the opportunity in 2021.

This report explores the key findings from the exclusive mobile operator  research and follows on from a similar project conducted by Mobilesquared for MEF in 4Q 2019.

Download Now

Close Menu

Member Login

Subscribe to our mailing list

* indicates required
MEF