Guillaume Le Mener Head of Marketing & Corporate Development Mavenir. Leonardo Hilario Planning & Project Manager Telefónica Hispanoamérica

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1 Guillaume Le Mener Head of Marketing & Corporate Development Mavenir Leonardo Hilario Planning & Project Manager Telefónica Hispanoamérica

2 Securing New Revenue from Messaging Fraud Prevention Telefonica & Mavenir Mobile 360 Latin America, Bogota, November 2017

3 Telefonica Leonardo Hilário Planning and Project Manager (Advertising) Mavenir Guillaume Le Mener Head of Marketing & Corporate Development 3

4 Securing New Revenue from Messaging Fraud Prevention AGENDA Why commercial A2P messaging is worth protecting & the impact of A2P messaging fraud Why fraud can be difficult to control & how machine-learning helps Telefonica s experience: The challenge, solution, results to date & future expectations 4

5 Mavenir Today 350+ Carriers 17 of top 20 TIER 1 CARRIERS GLOBALLY Our Customers Support 3+ BILLION Mobile Subscribers NGN Operating in 150+ COUNTRIES 37% Share of VoLTE / VoWiFi in the U.S. and Canada 10 BILLION Monetization Requests Annually 71% Share of VoLTE / VoWiFi in France, Germany, UK Leading VoWiFi / VoLTE, RCS and Messaging RCS Market Share Source: Based on GSMA, GSA, TeleGeography and Mavenir (July 2016) Number of launched Mobile operator networks ¹ LTM as of Q3 16. Industry s LEADING TECHNOLOGY World s First VoWiFi, VoLTE, RCS and vepc 75% Share of RCS in the U.S. and Canada >50% Share of global messaging 5

6 Commercial (A2P) use of mobile messaging is big business $64Bn Global revenues by 2020 (multiple sources) Millions Latin America Potential A2P Messaging Revenues 6,000 5,000 4,000 3,000 2,000 1, % CAGR Source: MobileSquared GLOBAL A2P MESSAGING FORECASTS (July 2016) 6

7 A2P Fraud Impacts Subscribers, Enterprises and Operators Poor user experience Ø Inability to interact with the application Ø Delivery failure Ø Variability in delivery QoS Reduced use of A2P messaging Reduced network service availability Ø Subscribers in cells congested by SIM Boxes Ø Roamers in networks connected via links congested by A2P messaging Ø Subscribers calling/messaging others in networks connected via congested links General Revenue Loss A2P Messaging Revenue Loss Losses from SMS fraud up to $6Billion annually Communications Fraud Control Association, 2016 Poor subscriber satisfaction Ø Poor A2P user experience Ø Service availability problems Ø Increased volumes of SPAM and malicious content enabled by low cost delivery Increased Churn 7

8 Operators in Latin America risk losing $billions 53.9% A2P revenue lost to grey route fraud in 2015 Source: MobileSquared GLOBAL A2P MESSAGING FORECASTS (July 2016) Millions 6,000 5,000 4,000 Latin America A2P Messaging Revenues $7.2Bn Cumulative revenues lost from 2017 to ,000 2,000 1,

9 Securing New Revenue from Messaging Fraud Prevention AGENDA Why commercial A2P messaging is worth protecting & the impact of A2P messaging fraud Why fraud can be difficult to control & how machine-learning helps Telefonica s experience: The challenge, solution, results to date & future expectations 9

10 Fraudsters ensure fraud is difficult to detect and control They rapidly adapt to overcome detection rules Hide their sources Vary the campaign profile Vary the content Monitor Results URL Shortening Text Variation Short bursts V6 Buy it now Order yours today Get yours now Buy some today Get it now Order some now Purchase one today... Random character sequences Homographic Variation Distributed sources Frequent changes Campaign Switching Your discount code is 4GY88X2 ɢěɴμɩnë ʀoιėx Canary accounts hidden amongst recipients 10

11 Automatic Machine Learning adapts faster than the fraudsters Determinable Rules >> New bypass techniques emerge Revenue Loss Continues Complex Ever-changing Rules >> New bypass techniques almost IMPOSSIBLE Revenue Loss Stopped - Quickly & Effectively Control Every Route ü Delay >> More traffic bypasses Manual Rule Definition Complex set of rules required Real-Time Analysis >> Stops Bypass FASTER Dynamic Complex Rule Evolution Complex Indeterminable Rules ü Manual + High-cost Manual Traffic Analysis Complex variations (sources and content) Automatic Real-time Machine Learning Rapid Evolution of Detection Rules ü Traditional Methods vs Mavenir SpamShield 11

12 Mavenir SpamShield Delivers World-Leading Results Telkomsel selects Mavenir s SpamShield for advanced SMS spam detection and filtering Up to 10x better detection Head-to-head against top 2 competitors Advanced message filtering detects up to eight times more spam related SMS messages than before to better protect customers from spam and fraud. SpamShield has reduced the effort and human intervention previously required to operate and manage the filtering, because there is no need to manually configure filtering rules SpamShield s ability to filter out grey route messaging enables us to sell SMS advertising via the appropriate channels Asep Y Septiana Telkomsel Vice President of IT VAS and Corporate Service Solution and Management 12

13 Securing New Revenue from Messaging Fraud Prevention AGENDA Why commercial A2P messaging is worth protecting & the impact of A2P messaging fraud Why fraud can be difficult to control & how machine-learning helps Telefonica s experience: The challenge, solution, results to date & future expectations 13

14 01 THE CHALLENGE Telefónica Hispanoamérica 14

15 The Challenge How to justify the investment? Mavenir had made audits in all our networks to identify types of frauds; A very small part of each country s CDR were analyzed to base the feasibility study; It had statistically estimated we were losing more than $18M per year to Grey Routes in the region Telefónica Hispanoamérica 15

16 The Challenge Statistic vs Reality P2P usage analysis Messages sent ,75% COUNTRY 1 COUNTRY 2 0,03% 0,20% 0,02% of users represents almost 70% of traffic 98,5% of the clients represent 44% of monthly SMS traffic! 38% of the traffic is generated by 0,07% of the users 50 Amount of Destination (User B) 99% of users behave like this: send a maximum of 150 messages to at most 50 different users Telefónica Hispanoamérica 16

17 02 Telefónica Hispanoamérica RESULTS 17

18 The Results Before and After the filters Telefónica Hispanoamérica On the first day we blocked 9 million messages and registered users on Blacklist Avg msg/user Messages Blocked BlackList ControlList

19 The Results Before and After the filters Before filters, the country had a deficit on interconnection costs. National Interconnection (Financial Balance) After, it started to have revenues! Balance on first month of usage: US$ 3M - Telefónica Hispanoamérica 19

20 The Results Before and After the filters But spammers are always seeking for new routes! International Traffic Telefónica Hispanoamérica 20

21 The Results Among the region Messages blocked between 5% and 10% of total traffic on first weeks. Stabilized on 2% till today (Total regional traffic around 2b monthly messages) Revenue CAGR of 20% on the first 3 months of the platform Using only basic filters. Starting to configure advanced filters on some countries on 4Q17. Telefónica Hispanoamérica 21

22 03 THE REAL CHALLENGE Telefónica Hispanoamérica 22

23 The Real Challenge Is the market prepared to control SPAM and FRAUD? The user knows how to identify a suspicious message? When a user identifies a suspicious message he/she knows who to call? Or call directly to his/her carrier? Or call the Regulation Agency? The government regulators penalize the carriers based on complaints about long number Spam? The government regulators understand the necessity of the message analysis and filters? The carriers are aligned between them? There are self-regulated independent associations in each country/region to control players? 23 Telefónica Hispanoamérica

24 Time for your questions?

25 THANK YOU

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