Least-cost routing makes a comeback

Least-cost routing (LCR) has already been written off as a thing of the past. The ICASA mandated lowering of interconnect fees caused, according to some, the bottom to fall out of the LCR business model some time ago. With voice over Internet Protocol (VOIP) offerings gaining prominence in the market, many pundits expected LCR to fade into history.

But, last week, new Cell C CEO Allan Knott-Craig launched his brand aggressively into the enterprise space, with an LCR service that drops mobile calls as low as 99c minute. The move is likely to open up significant cost saving opportunities for local enterprises of all sizes.

“We never left the LCR space, because for many of our clients it was still a viable cost management option. People said it was dead, but we certainly still experienced enough demand to keep on operating in this sphere, together with VOIP,” says George Smalberger, MD of SS Telecoms, one of the country's leading providers of telephony solutions. “That said, Cell C's new offering certainly breathes a lot of life into the LCR business case - there's no doubt about that.”

SS Telecoms supplies the SS-10, the SS-15 BRI and the SS-79 FCTMUX to enterprises ranging in size from major corporations to small businesses. For organisations that have already moved to an all-IP network, the company developed an IP-based LCR unit, the SS-16 IP, which routes from VOIP to GSM networks.

SS Telecoms has welcomed Cell C's LCR move, and believes it is a very necessary step in driving the country's notoriously high telecoms costs down. It also cautions business decision-makers not to commit too heavily in any particular telecoms direction, given the fluidity in the market.

“Things are changing constantly,” says Smalberger. “VOIP is obviously becoming more and more attractive. Bandwidth improves all the time, and the WACS cable has just been launched, so this is an important avenue for many organisations. But, the reality is that a significant portion of the market doesn't have ready access to the right kind of infrastructure for effective VOIP. This is why we remained in the LCR market - LCR still plays a very important role for us in helping our clients control their general telephone costs. Announcements like Cell C's also show that in our current market, context prices and offerings are going to shift markedly on an ongoing basis. Companies need to be positioned to take advantage of shifts as they occur.”

Cell C's stated intention with its LCR offering is to break down barriers to entry for smaller businesses and SMEs. SS Telecoms believes the brand's move will do exactly that - regardless of how companies choose to take advantage of it.

“Cell C's competitors will be forced to respond and the market will push and pull pricewise for some time,” says Smalberger. “A company can go with a branded LCR product from a mobile provider or choose a solution that will deliver the best route for the call across all the networks, which ensures optimum value even when the price wars are in full swing. These devices take a few minutes to install and away you go. But regardless of how specific organisations approach it, there's no doubt LCR will remain a very valid telephone solution for some time to come.”