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Wholesale VoIP Feature Article

Has LCR 'Lost its Cost Advantage?'

June 06, 2012

By Allison Boccamazzo, Director of Brand Strategy

Least cost routing (LCR) makes handling outbound communications traffic easy and inexpensive, allowing the path of outbound communications traffic to be based on cost. As the benefits of LCR are continuously being pushed further along with the May 2012 launch of Cell C’s LCR AnyNet, consumers find themselves once again trapped within the confines of telecommunications costs.

Things such as lower termination rates, long-term impact on the current and prospective cuts in the wholesale interconnect rates, and consideration of investment in infrastructure and new age technology models come into play here.

Wayne Speechly, executive for communications, Internet Solutions, clarifies, saying, “Quite simply, LCR has lost its cost advantage. As VOIP services become mainstream and commoditized – a trend we are witnessing gather momentum on a month-by-month basis – so the benefits of LCR become diluted…this doesn’t even take into consideration the value added capability like unified communications or enterprise mobility. LCR is limited in its ability to add value and certainly doesn’t drive the adoption of better organizational communications capability.”

It is true that as the interconnect rate drops, business and users embracing VoIP are the ones who will benefit from the net gain – especially those utilizing mobile VoIP. Many consumers also agree that VoIP is taking over at an alarming rate and that businesses are switching to cloud-based services on an immeasurable basis.

Speechly concludes – or more like puts the cherry on top of – his argument by saying, “There is no real argument for remaining with an LCR provider. In a like for like comparison, examining both cost and quality, LCR receives a drubbing from VOIP.”

This can inevitably only mean one thing; LCR and VoIP are back in the shining, bright white spotlight, but how will it play out?

Edited by Jamie Epstein

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