Telecoms.com periodically invites expert third-party contributors to submit analysis on a key topic affecting the telco industry. In this piece James Lasbrey, Head of Wholesale Messaging at Telefónica looks at how businesses can get the most out of bulk messaging.

Receiving a text from your doctor’s surgery confirming an appointment or an airline letting you know that online check-in is now open is viewed as a completely acceptable way for a business or public service to communicate with their customer. Generally speaking the customer is very happy to receive these messages having usually signed up for the alerts in the first place. Additionally with SMS gaining momentum as the preferred form of communication for customers – given the high open & response rates – it is close to surpassing email as a favoured form of business communication, so it’s just as well that evidence points to customers valuing it.

This form of “mass” communication by brands, organisations and enterprise is known as bulk messaging, business SMS, SMS push notifications or to give it a technical term Application to Person (A2P) messaging – one way messaging from a computer application. Simply put and at its best, it’s broadly about being able to send the right message, directly to the right person at exactly the right time but in bulk to a large customer base wherever they are in the world.

As you can imagine sending messages in bulk can quickly add up in cost and leave a lot to be desired in terms of quality when using the traditional person-to-person (P2P) text service – which is not designed for mass texting. So brands and organisations started working with bulk SMS providers or aggregators as they are more commonly known, to benefit from the lower pricing these brokers can offer. Trusted Tier 1 aggregators will typically partner with mobile operators to purchase wholesale SMS services at a reduced price that they can offer to their customers. Additional cost efficiencies result from the practice of them sending these messages via what are known as grey routes or international routes that fall outside of the regular course of business between the licensed telecoms companies in each country. These routes are used legitimately by bona fide aggregators to take advantage of consumer routes which exist between many international operators to send large quantities of SMS messages for less.

The “grey” part of the route is usually at the receiving end where the message terminates its journey on one operator’s network. The text is often made to appear as if it originated locally through the manipulation of the SMS sender ID having passed from a foreign operator’s P2P gateway. And it’s this element of a grey route that appeals to the more unscrupulous player looking to set up shop. These organisations will use what are known as SIM farms to help with the “bulk” component. SIM Farms are banks of mobile devices which contain SIM cards and connect to networks just like mobile phones. They typically use PAYG (Pay As You Go) with unlimited SIM deals offered by the networks and commonly associated with senders of junk but as you will see later in the piece, not always.

The problems arise when underhanded suppliers exploit these routes using SIM Farms and a loophole that stems from the historic practice by telcos of not traditionally charging for incoming traffic because they expected the costs to balance out when the recipient on one network sent a reply back. This allows less honest players to avoid paying any interconnect fees in order to offer unfeasibly cheap message services. Hence those annoying unsolicited nuisance messages such as “Congratulations! You have just won an iPhone” or “Have you had an accident? Text HELP to xxxx”. These messages not only clog up networks and annoy customers, but also cost operators connection or termination fees.

Due to the sheer volume of texts sent they invariably violate the Terms & Conditions of the networks who provide them – breaching the fair use clause which forces networks to block those cards. And if they manage to stay under the radar and are not blocked, used in this way these routes can be highly unreliable given the capacity of a single SIM card is limited to 1 message per second, so delivering an urgent message can sometimes take hours. The consequences range from the loss of efficiency and reputation of a business to real human tragedy.

An extreme example took place in 2012 following a series of catastrophic floods that had caused devastating landslides in Rio de Janeiro and surrounding mountain cities. Amidst the commotion the Rio Government swiftly hired an SMS distribution company to forewarn residents via emergency warning alerts. The decision was rushed through with the provider resorting to the use of SIM farms. Consequently not all messages got through and people died as a result.

Closer to home is an example where business SMS is adding true value. The Welsh Ambulance Service currently uses a managed bulk text service to contact trained voluntary first responders that can often get to an incident faster than ambulances. For some patients having someone arrive sooner and be able to send an assessment to the paramedics could mean the difference between life and death.

The solutions to the indiscriminate use of grey routes and SIM Farms are not straight-forward at all. Simply shutting them down was found not to be the answer as telcos risked blocking traffic from strategic partners and trusted aggregators.

While the clean-up process is still in its infancy, organisations such as the Mobile Ecosystem Forum (MEF) with whom Telefónica is collaborating, are working towards aligning the Industry to tackle such messaging abuse. Rimma Perelmuter, MEF CEO said: “Industry understanding of this complex issue, along with transparency and building consumer trust are vital to ensure the bulk messaging business can realise its full potential. MEF and its members are raising awareness of this business critical issue in order to protect legitimate players across the ecosystem.’

From Telefónica’s perspective, it could mean that SMS prices need to rise a little – not too much as to decimate the volume – but enough that telcos can help police networks. With reputation, safety and privacy hanging in the balance, it’s money well spent and means you don’t have to choose between quality or cost. “The power of the mobile age lies in our ability to reach any one of the 6 billion people in a fast, reliable, secure and affordable way regardless of where they are. SMS remains the only channel to truly deliver mission critical communication sin this way but requires buyers to be vigilant and educated. Ask for guaranteed direct 1-hop connections, service level agreements and Tier 1 aggregator” advises Rob Malcolm, SVP Mblox – SMS service provider.

In the future we see the bulk concept developing in ways that marry with our digital, constantly connected, lives. The simple and effective nature of a text message performs an essential role in customer updates, alerts and relationship building, but could soon go one step further to include mass video messaging. In the age of OTT and LTE, the blending of the digital layer will be the next logical step with more challenges to overcome but also greater opportunities. The likes of Uber and Airbnb are already making inroads by combining SMS and voice to create a smart digital service that prioritises context – the real essence of bulk.

James is Telefónica’s Global head of messaging. The role covers all of Telefonica’s markets across LATAM and Europe and compliments James’ experience running the UK messaging business for O2. James and his team are responsible for defining the global messaging strategy and sharing best practice across the group to accelerate the growth of the messaging market. Both inside and outside of Telefónica, James is a strong industry advocate for messaging and has helped galvanise the industry. He is focused on building customer trust and driving innovation and evolution of the messaging ecosystem. James is a Global board Director for MEF (Mobile Ecosystem Forum) and is head of the growth committee.