What Isa Gray Route?

There are three types of routes:

• White

A route where both ends are on legal terms.

• Gray

A route where it’s legal for one party and illegal for the other.

• Black

A route that’s illegal for both ends.

Understanding the Full Picture of Gray Route

Imagine you live in country A and you're sending an SMS to a recipient that's also in country A. Whether or not you use different network operators, both of you are in the same country—meaning, the network operators have some sort of agreement.

Now, imagine you live in country A and you're sending an SMS to a recipient that is in country X. In this scenario, country A's network (the originator) allows overseas networks to pass the message at a reduced price.

Lastly, imagine you live in country A and you're sending an SMS to a recipient that is also in country A. But, the catch is you're sending it via country X's network first and then back to country A. In this case, the message you send will essentially be free for you.

This practice is called gray routing—companies usually implement this when sending high-volume business SMS messages.

Gray routing supports overall SMS traffic but doesn’t generate revenue for telecommunications since it's legal on one side and illegal on the other.

How To Tell if a Message Went Through a Gray Route?

• Price

A low price of a message can indicate that the message traffic goes through a gray route.

• Provider

Ask your SMS service provider if they use direct interconnections.

• Delivery Speed

The delivery speed can determine whether or not the traffic goes through a gray route.

Why Doesn’t Gray Route Generate Revenue for Telecoms?

When sending an SMS, telecoms pay for signaling and network maintenance for the given traffic. But since there's a U-turn per se in gray routing, the route doesn't get monetized.

White routing accounted for only 52.3% of the total A2P SMS traffic from 2017 to 2022. This means that 47.7% of the traffic went via gray routes. Operators should have had a revenue of $30.8 billion, but gray routing prevented that from taking place.

Types of Gray Routes

While gray routing supports SMS traffic, it does not generate revenue for telecommunications companies. Even if a gray route is not properly monetized, telecoms must still pay for signaling and network maintenance for this traffic. Here are three types of gray routes to be wary of.

• Telecoms

This type of gray route is the process of bypassing mobile operators in a way so you don’t get charged. And if you do get charged, it's only for a local P2P rate. This is achieved by having one of the telecoms masks A2P traffic as P2P for a lower cost.

• Aggregators

A telecom can use a local aggregator to avoid paying high roaming fees. Local aggregators have a registered Sender ID and national A2P rate, which is lower than the international rate. The international traffic is delivered under the national traffic, and the sender pays with the national rate. The operator, in turn, suffers revenue loss.

• SIM Boxes

A SIM box is a piece of hardware with hundreds of prepaid SIM cards, each of which is able to reroute a call. Prepaid cards offer a lower SMS price than direct A2P telecom charges, or they include a fixed amount of free texts in their first bundle. The difference in prices is how a SIM box makes money. While they may only earn cents on the dollar every minute, this all adds up when there are hundreds of calls in progress that linger for several minutes at a time.