HAUD Systems 5 Ways to Win over SMS Fraud

About HAUD Systems Based in Malta (Europe) with branches in UK, Sweden and Singapore. Developing proprietary filtering solutions and secure connectivity pathways for MNOs and SCCP carriers. Started in 2011 by bringing together people from the aggregator world and the telco environment. Developed its first prototype by May 2011 and obtained its first customer by the end of that year. Constantly seeking new ways of combatting technical fraud through its latest solutions. Currently partnering with a number of integrators and SCCP Carriers as well as groups of operators to roll-out the solutions in various parts of the globe.

Setting the Scene Application-to-person (A2P) SMS messaging will be worth $70.1 billion by 2016,according to a white paper from Juniper Research, May P2P likely to flatten out in view of OTT messaging services and further smartphone penetration – what about A2P? 9.8 trillion text messages were sent in Pew Research >40 sizeable aggregators in Bulk/A2P messaging and growing. > 95% of text messages received are open and read within minutes The United Kingdom Application-to-Person (A2P) SMS market is estimated to grow from billion in 2011 to billion in 2016

OTT vs. SMS Sources: Portio Research Febuary 2012 via: mobiThinking Over-the-Top (OTT) messaging vs. SMS messaging

Lost Opportunity = Lost Profits SMS business growth has attracted spammers, fraudsters, and illegitimate users, resulting in revenue leakages and lost profit potential for MNOs. Asia is the largest mobile market in the world and Asia Pacific has the highest volumes of A2P traffic per capita. Over 700 million mobile subscribers in Africa represent the second largest mobile market and has been growing at 20% per annum. Over 270 million spam messages are sent every day worldwide. 95 million spam text messages are processed per day in Europe & America alone. Some MNOs report revenue leakages of >10%. This can be much higher in certain cases!

The Market Reality Consumers are not best placed to protect themselves from SMS Spam & Fraud Marketers will always find a way to spam consumers The activities of regulatory authorities are well-intended but not very effective in practice and many a time they encourage self MNOs would gain a competitive advantage (both reputation and revenue) if they implement the necessary control measures.

Prevention is the only way forward to combat mobile spam effectively, whilst protecting subscribers and the network resources. Are you protected? Do you have the necessary tools to recover revenue leakages generated through grey routes?

A Real Case As seen in our case studies with previous trials, operators were unaware of their interworking/non- interworking international traffic ratio, and assumed that A2P was only between 20% to 30% of their overall traffic. But what’s the veritable ratio?

Number Crunching MNO. : 40M Subs Estimated Connections: Assuming that each subscriber receives 2 messages a month. MNO: 80M Int. Incoming SMS Monthly Traffic Estimation & an average Grey Routes Termination rate of $0.007 With 70% of your traffic being Interworking, leaving 30% lost to Grey Routes MNO would be losing $2 Million p/a over Grey Routes If MNO were to block Grey Routes and charge as high as $0.06 for incoming traffic, MNO could potentially stand to make an additional: $17.3M p/a Revenue Increase

Benefits of Network Profiling Grey routes were thought to be less that 20% of incoming traffic Operator Blocked Grey Routes by GT/Country (not effective) Operator thought SRI to SMS ratio was balanced Thought they were well equipped for SMS Fraud Before Trial After Trial Grey routes found to be greater than 45% of incoming traffic SRI to SMS ratio was unbalanced Wangiri Fraud amounted to only 1% of traffic Grey Routes, when blocked used alternate GTs and sources Fraud identified and countered Revenue leakage stopped Extent of Grey Routes identified and monetized. New Revenue Streams! Accurate statistical data and reports presented Zero Capex Benefits:Findings:

A Guide in Five Steps Request an Audit/Profile of Your Network Choose a solution with analytics & alerts to be able to pre-empt fraud Ensure you have blocking control and don’t rely on manual blocking Choose a partner who is an expert in the field to help combat fraud Most Importantly: Monetize the foregone revenues!

Your Benefits

Thank You Contact one of our offices: Malta : Sweden : UK : Singapore : HAUD Systems