How Least Cost Routing Makes Businesses Profitable?



A few decades back, long-distance and international calls were among the biggest expenses of businesses. In the early 1990s, the inception of Least Cost Routing reduced phone call costs to a great extent and enabled businesses to maximize their profits.


Now, the question arises “What is Least Cost Routing?”


Well, it is the process of choosing the best path for outbound voice calls based on the minimum available cost for a given route. The process chooses the least expensive route by taking call quality, latency, and dropped calls into account.


In the past, Least Cost Routing entailed the manual export of the routing table to a Private Branch Exchange or a public switched telephone network (PSTN). But now, the contemporary Least Cost Routing models use routing software and engines to host millions of routes based on the lowest cost.


At HoduSoft, our IP PBX Least Cost Routing System has helped many businesses to reduce their call costs. Here, we have discussed how implementing Least Cost Routing enhances profits and how businesses can select the right routing software.


How Least Cost Routing reduces international call costs?


International calls are exorbitantly expensive when they are made using a landline connection. But, as the name suggests, Least Cost Routing minimizes international costs by dividing traffic between multiple carriers and routing as well as optimizing the course and direction of outbound traffic.


A recent study found that Least Cost Routing can minimize communication costs by up to 75 percent and enhance the overall profitability of businesses.


Apart from enabling intelligent and automated call route selection, Least Cost Routing also eliminates the fees associated with unnecessary point-of-presence (POP). All in all, Least Cost Routing enhances a business’s profitability by leveraging affordable and competitive carriers.


How Least Cost Routing works?


Let’s suppose there are two telecom operators—Company P and Company Q. The former has the least expensive rate between 7 am and 6 pm, while the latter has the best rate during the remaining period. A Least Cost Routing IP PBX system identifies the minimum rates at any given time and selects the service provider with the least expensive rates.

 

In the real world, an external routing system or routing software loads tariffs or price lists from different service providers.


Different service providers use various codes for the same destination. To understand thecodes (or prefixes) better, the system converts all tariffs to the same format.


The system creates a routing table, which contains various prices for a wide number of routes.


Upon receiving a call, a telecom switch sends a query to the routing system for instructions. The system performs a dynamic computation of all routes and instructs the switch to route the call to the least expensive path.


Protocols such as Session Initiation Protocol (SIP), E.164 Number Mapping (ENUM) protocol, and Open Settlement Protocol (OSP) supports the interaction between the routing system and the switch.


In case of the routing fails, the switch selects the second best route and repeats the process until the call passes through. The process is generally complete in just a few milliseconds.


How to choose the most suitable Least Cost Routing software?


When it comes to choosing the right Least Cost Routing software, it is extremely crucial to know the tasks it can perform. Here are some key tasks a sophisticated Least Cost Routing should be able to perform.


  • Automatically load code tables and prices schedules

  • Control available capacity and volume commitment

  • Compare dial codes

  • Put costs in order

  • Incorporate quality considerations

  • Generate costing and routing schedule

  • Transfer data into billing system


It also should be able to track traffic volumes, traffic routes, peak or slump patterns, and price schedules so that call providers can make decisions to optimize the routing process.


In conclusion,

HoduSoft’s flexible and intelligent real-time routing capabilities help providers find and utilize the best rates offered by their lowest-cost.
Location: Denver, CO, USA

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