What is an SMS Gray Route?

An A2P SMS gray route is a route that is designed to transmit SMS traffic but is less expensive (or free) because it does not fairly compensate the telecoms that facilitate it.

SMS gray routes are illegal in some territories because even though they are not properly monetized, the telecoms are still paying for signaling and network maintenance for this traffic. Telecoms cannot achieve their full revenue potential unless all grey routes are closed.

What do SMS route colors mean?

Apart from grey routes, there are also white routes and black routes.

The white route is where both the source and the destination support SMS traffic and generate revenue for the telecoms that facilitate it. Black routes do not provide revenue for either end of the route and are usually illegal.

What are the three types of gray routes?

  1. Telecom to Telecom: Telecom A has a roaming agreement with Telecom B overseas for P2P messages. The ratio of incoming and outgoing messages is usually 1:1, so neither telco charges the other for that traffic. Unfortunately, one telecom deliberately masks A2P traffic as P2P instead and monetizes the traffic the other does not, also known as the leased global title (GT) address approach misuse in the industry.
  2. A2P Aggregators: Telecoms can avoid paying high roaming fees using local market A2P aggregators. In this type, Telecom A is using a local aggregator, which has better SMS rates than Telecom B, to deliver A2P traffic over SMPP routes. In doing so, Telecom A avoids paying the agreed price to Telecom B, and Telecom B ultimately suffers revenue loss.
  3. SIM Boxes: These devices use prepaid P2P SIM cards to terminate premium A2P traffic. Prepaid cards have an SMS price lower than direct A2P telecom prices or offer a certain number of free-of-charge messages in their kickoff package. The difference between those prices is where SIM box fraudsters make their margin.
May 7th, 2020
2 min read