During his time as Commercial Director at O2 Ireland, Brian D’Arcy set out to reduce the revenue leakage the operator was experiencing. He succeeded, recovering approximately €2.5 million that would otherwise have been lost.
Brian has since joined Anam Technologies, a leading revenue assurance provider for mobile operators, and spoke with TelecomsTech about how he closed a significant gap in messaging billing that the industry estimates costs billions annually in preventable losses.
How the loss occurred and how it was fixed
Brian explains that the gains came from properly billing Application-to-Person (A2P) SMS traffic. “We billed 90 million messages that we hadn’t been billing before,” he said. “We went from billing virtually nothing on A2P traffic to billing close to €2.5 million a year.” The issue stemmed from SS7 interconnects where carriers pass traffic between networks without charge in certain routing scenarios, allowing substantial A2P traffic to bypass billing systems.
Stopping that leakage had a notable impact on O2’s revenue and also benefited customers. When A2P messages can be delivered cheaply or for free, businesses send far greater volumes of messages. That low cost encourages higher levels of spam and can enable fraud, for example where messages prompt recipients to call premium-rate numbers.
On the business side, many companies use SMS for operational tasks—PIN authorisations, offers, order confirmations and delivery notifications. When they choose the cheapest routing path, delivery quality can suffer. Low delivery rates mean businesses may assume messages were received when they were not, undermining reliability and customer experience.
Large, reputable aggregators also found the unregulated A2P environment problematic. Without consistent wholesale pricing and reliable routing, quoting and delivering for major clients becomes complex. As O2 introduced filtering and more reliable routing, customers migrated to them for guaranteed delivery. “Customers would come to us and say, ‘We know you have a filtered solution for grey routes and your network interconnects with all the other operators. If we deliver it to you, we can be sure the traffic will be delivered,’” Brian reported.
The change was mutually beneficial: O2 monetised existing messaging products and customers gained improved delivery. Results were rapid, and A2P continues to grow strongly, typically by 20–30% year-on-year. Industry research has forecasted A2P messaging revenues surpassing person-to-person (P2P) revenues in the near term.
Are other operators following O2’s approach?
Brian noted that, at the time, O2 stood out in Ireland as the only one of the four major mobile operators to have robust filtering and controls in place. Other operators remained wide open, allowing grey route traffic to pass through unchecked. His research across multiple countries found many operators still lacked effective filtering.
Attempting to filter manually is insufficient. “It’s like manually putting up a firewall to stop someone hacking into your laptop—the game keeps changing and new threats keep getting through,” Brian said. Effective protection requires fully automated, managed systems. Partial, ad-hoc approaches act like a sieve: any holes let traffic through. He estimates roughly 75% of operators worldwide do not effectively block grey routes.
Network innovation, consumer choices and emerging revenue opportunities
When asked whether network innovations such as HD Voice influence a consumer’s choice of operator, Brian said price usually comes first, then quality. Most consumers prioritize cost, asking “What can I get mobile connectivity for?” rather than opting to pay a premium for brand alone. However, there is an expectation of acceptable service quality; if that expectation isn’t met, customers will quickly switch or complain. As networks evolve with technologies like 4G and beyond, expectations rise while consumers often expect lower prices, which creates pressure on operators’ business models.
Over-the-top (OTT) services also challenge operators by relying on connectivity often provided on thin margins or for free, complicating operators’ economics.
Regarding the forecast of tens of billions of connected devices, Brian observes that the current base of devices connected to people globally is in the billions, and scaling to tens of billions will create new revenue opportunities for operators. The growth in connected devices represents a potential source of additional revenue as operators develop services and business models to support and monetize that expansion.
Brian’s experience highlights how disciplined revenue assurance, automated filtering of grey routes, and reliable A2P billing can turn previously lost traffic into meaningful, recurring revenue while improving service quality for enterprise and consumer customers alike.
What do you think about Brian’s insights regarding A2P? Let us know in the comments.