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Johnny opened on the TCR sale, how the minimum bid to get into the data room is $300M. The other news item is Infobip becoming a D2C (Direct to Carrier) aggregator in the US, as T-Mobile replaced Syniverse with Infobip. I covered how in August I had 13 days with no SMS spam during this transition. Johnny was focused on how this change will drive the Infobip IPO.

Another question raised given today’s announcement from Infobip, it’s unclear if Infobip are also bringing competition to the TCR. It could just be a copy of the additional campaign verification check Syniverse provides. But such a redundancy seems at odds with the intent of the announcement.

Talking to CSPs (Campaign Service Provider) their collective view is Infobip does not yet have all their directs finalized but will soon. Many CSPs are now contracted with Infobip to provide short codes, 10DLC and TF (Toll Free), and are ready to make a transition if/when appropriate. Wow! the market is moving fast.

Back to AIT, Artificially Inflated Traffic. Before we begin, everyone on this call are independent, has no interest in a CPaaS company, the most common AIT generators.

Kevin Graham made an important statement at the start of the conversation, AIT is a nuanced topic. The source of the data is critical, 80% of the discussion will seem straightforward and clear, but it’s the 20% that is not mentioned can flip the story.

People who blame the brands for wanting low prices fail to point out the brands have no metrics. There simply is no regulation, no standard for the governance of SMS. For 30 years this gap has resulted in today’s poor situation for business and consumers using SMS.

Brands are fleeced and CPaaS companies make money, see Elon Musk’s rant. He tried to close down routes to those companies defrauding him, but without governance, he had no control, they used alternative routes.

AIT in the beginning was simply using an app to create fake accounts to drive traffic. Simply, using SMS OTPs (One Time Passwords) to drive traffic and hence revenue. AIT is pure and simple fraud.

The evolution beyond revenue generation is to influence conversion rates, quality perceptions of a route. That is ‘customers’ receive the SMS OTP and sign up, conversion. Then AIT traffic can make alternative routes appear poorer, with lower conversion. And hence the fraudster wins traffic from the brand being subjected to AIT. The brand has no way to know what is being done to them, as there is no governance in SMS.

Money is spent to make competitive routes look poorer, so overall the brand spends more than before AIT was being applied within a specific time period.

Another change in AIT is its democratization , that is an account management within a company can spend their own cash on AIT, say $2k, receive a kickback from the CPaaS, say $5k. Win new business from the brand, appear a hero and receive a bonus. While the brand is spending more annually.

The lack of audit / governance common in many transaction based industries like financial services and banking, is missing in messaging. We had a discussion around where can the driver for an A2P 3.0 governance model come from? GSMA is unlikely to mandate it. Perhaps with the rise of RCS, Google could be the driver. To differentiate RCS from legacy SMS.

Kevin made an important point, he would not sign the MEF code of conduct as he knew his company could not meet the conduct’s requirements. Yet others he knew were not meeting the code’s terms did!

Daniel’s experience with Augnet brings a wealth of experience on the challenges of selling compliance / governance in messaging. Messaging is moving into a dangerous phase, on the dark web there are real time APIs to receive live OTP, its 3 Euro per SMS.

With that information a fraudster can call the customer and potentially steal their credit card details, as the have the OTP to confirm identity. Daniel pointed out that’s in violation of ISO27001 (information security management systems). Cybersecurity could become the driver for compliance and governance in messaging.

We’ll be discussing this more, there must be a way to protect grandma from all the AIT generated by CPaaS companies.