Grey routes versus direct carrier connections — why cheap SMS costs more

Same Hong Kong number, and one provider quotes a price well under the market. That is the moment to ask a question: how does this route actually work?

The answer is often “grey”.

What a grey route is

Legitimate A2P (Application-to-Person) messaging means the provider holds an agreement with the carrier and the traffic enters the network through a commercial channel. The carrier knows it is commercial traffic, charges the commercial rate, and takes responsibility for delivery and reporting.

A grey route bypasses that agreement and gets the traffic into the network some other way. Common mechanisms:

• SIM farms — racks of devices with prepaid SIMs, disguising commercial traffic as person-to-person messages.
• International transit — handing traffic to an operator in a low-rate territory and looping it back to the destination over interconnect agreements.
• Resale chains — the message changes hands several times before it enters the network, each hand squeezing cost.

Grey routes are cheap for a simple reason: they are not paying what commercial traffic is supposed to pay.

Cost 1: your sender name gets overwritten

This is the most immediate loss.

On grey routes the sender name you set is frequently rewritten in transit — the customer sees an unfamiliar mobile number instead of your brand. For a company spending money to build trust, that money is simply gone.

In Hong Kong it is worse. Under the OFCA sender-registration scheme, a registered # Sender ID is the credibility marker. A grey route cannot carry it at all. The registration process is covered in Registering a # Sender ID in Hong Kong.

Cost 2: the DLRs may be fabricated

On a proper channel the delivery report originates with the carrier and reflects the real state of the handset.

On a grey route the “delivery report” is often invented by an intermediary. The message goes out and nothing comes back, so to give the customer something, everything is reported delivered.

How do you spot it? Look for failures.

If a provider’s reporting persistently shows 99.9% delivered with essentially no UNDELIV, no EXPIRED, no REJECTD, that is not route quality — that is an absence of any real reporting source. A real network always contains switched-off handsets, recycled numbers, and content that gets refused.

What a normal distribution looks like is covered in DLR status codes explained.

Cost 3: deliverability is unstable and fails abruptly

Carriers continually detect and block grey routes. So your delivery rate is not “slightly worse” — it looks acceptable for a while and then halves overnight.

For a campaign that is lost revenue. For OTP it is an incident: users cannot log in, support lines light up, and you cannot even diagnose it, because your provider does not know where the messages went either.

Cost 4: the compliance exposure lands on you

A grey route bypasses the carrier’s commercial agreement, but responsibility for message content stays with the sender.

In Hong Kong, commercial electronic messages fall under the Unsolicited Electronic Messages Ordinance: sender information must be accurate, an unsubscribe facility must be provided, and numbers on the Do-not-call Register must not be messaged. Grey-route providers generally will not — and cannot — filter the register for you. When something goes wrong, it is your brand that is pursued, not the cheapest intermediary in the chain.

The duty list is in the UEMO compliance checklist.

Four tests you can run yourself

Do not take anyone’s word for it — measure:

1. Sender name test. Send one message to your own handset and check the sender name displays as configured. Replaced with an unfamiliar number is a clear signal.

2. Failure code test. Deliberately send to a number you know is disconnected. A proper channel returns a definite failure status; a grey route is likely to report delivered, or return no second-tier report at all.

3. Submission reconciliation. Ask the provider for two numbers: requests you sent, and messages actually submitted to the carrier. They should match. We put that in writing — see the full-submission pledge under Honest Delivery.

4. Peak-period test. Test during an SMS peak — the run-up to Lunar New Year, a major sale window. A grey route may look fine on a quiet Tuesday; it is the first thing dropped when the network is congested.

How cheap is suspiciously cheap

There is no absolute figure, but think about it structurally: in legitimate A2P pricing the carrier leg is a hard cost, and there is limited room for a provider to compress it. A quote low enough that the hard cost cannot be covered means the route is saving money somewhere else.

Where we stand

We connect directly to regional carriers and do not use grey routes. That means we will never win on price against a grey quote — a trade-off we make deliberately.

What you get instead: the sender name displayed as set, DLRs carrying carrier-grade error codes, failures reported as failures, every accepted request submitted, and numbers that reconcile.

For OTP, for financial notifications, for any brand that depends on being trusted, the value of that is not visible when things are fine. It is visible when they are not.

To talk through how our routing works and what it costs, get in touch.