While least-cost routing (LCR) remains a viable and popular option to significantly reduce business telephone call costs, it must be asked what will become of LCR and the vendors that make their living from this service.
Although VOIP is considered as the new revolutionary cost-savings mechanism to herald in an era of low call costs and converged communication mediums, it is yet to mature and become a tool to cater for the needs of businesses broadly. The reality is, however, that VOIP and associated technologies will indeed evolve and mature, leading to a shrinking market for the traditional LCR vendors.
These factors considered, it is clear that LCR vendors are going to have to gear themselves up to not only offer LCR services but to broaden their offering to include VOIP solutions, even though the adoption of this technology will take a year or two. Those LCR companies that do not re-invent themselves face serious business viability risks.
This is according to James Herbst, financial director at listed telecommunications and ISP company, DataPro Group. "LCR is certainly not dead, but it is slowly losing market share and those companies involved in this market - and there are some big businesses, turning over millions annually - are going to have to start embracing VOIP over the next few years if they are to stay abreast of changing technological times."
LCR is the method whereby vendors direct phone calls via the most cost-effective carriers and routes at any given time.
Commenting further, Herbst said VOIP - legalised earlier this year - and LCR will co-exist for a few years. He also described LCR "as a stepping stone" into the more effective VOIP solutions, especially for smaller companies that currently cannot justify, or afford, the overall costs of implementing VOIP, including increased bandwidth requirements.
"Service providers who think they can carry on as LCR purists are going to have to realise that time is against them. They are going to have to start re-engineering their businesses."
Some of the bigger companies operating in SA that currently offer LCR solutions are Orion, Storm and Definity Telecomms.
Share
Editorial contacts