Inbound and Outbound voice communication traffic takes pole position as Least Cost Routing steps down

MTN Business provides forward looking insight into industry changes

20 April 2011; Once hailed as a technology that impacted the telecoms industry in a positive manner, Least Cost Routing (LCR), certainly made its mark on fixed to mobile outbound voice traffic. However, market dynamics are constantly evolving and due to changes within the ICT sector, the demise of LCR is inevitable.

“MTN Business understand this, and believe that it is crucial for telecom service providers to inform businesses of such changes to allow for the implementation of more relevant technologies for continued successful business operations. It is about taking a consultative approach which means continually working with your customers to optimise their environment,” says Justin Colyn, General Manager of Fixed Mobile Convergence at MTN Business. “Considering the cut in interconnection rates in the local fixed and mobile markets, it is no longer viable for the telecommunications market to push LCR into the market any further. In fact, the LCR business model can be considered 'deceased'. Rather, telecommunication providers should be looking at the next wave of technologies for their customers, which follows on from LCR – technology such as Session Initiation Protocol (SIP) Trunking – which will change the way in which inbound and outbound communication is experienced for all call types. SIP-Trunking is not only about mobile LCR, but can add a tremendous amount of business value through advanced services when fully understood.”

The uptake of LCR indicates that this technology and it's associated business model played a key role within the telecommunications market, exploiting the imbalances that existed in the interconnection rates for fixed to mobile outbound calls. However, the telecommunications sector has now moved towards SIP Trunking, whereby voice, and subsequently converged communication is being revolutionised for the better, and as a result, is offering immense new value propositions for enterprises.

“SIP Trunking is delivered to a customer using a combination of IP technologies that not only improves the quality of voice, but more notably, is more cost effective than traditional LCR, while simultaneously delivering feature rich voice communication, which, today, is a must have for any business,” adds Colyn. “Furthermore, such a technology uses the SIP standard for signalling and call control, meaning that multimedia call connections can be effectively established between any fixed or mobile end device. SIP Trunking provides the great advantage whereby legacy Primary-Rate Interface (PRI) to the Public Switched Telephone Network (PSTN) and the LCR can be replaced with converged voice and data connection to the operators' next generation IP core networks, delivering additional cost savings.

SIP Trunking is well proven internationally, where most carriers now offer SIP Trunking due to its ability to provide a cost saving of 25 – 50%*, giving it strong business value. With SIP Trunking services, a customer is still able to retain their existing premise based PBX, while gaining access to the benefits of enhanced hosted features and functionality without immediately undergoing a transition to a fully hosted service offering.

“Considering the change the market is experiencing, it is crucial for telecommunication providers to be transparent on technologies that no longer have relevance (especially if they provided the now redundant technology), and provide customers with insight into the type of technology that will provide them with a longer business retention cycle. MTN Business aim to do just this and believe that SIP Trunking will, just as LCR has, play a vital role in the market now and in the years to come,” concludes Colyn.

*SIP Trunking and Least-Cost Routing Come into Their Own, Farther than the eye can see, January 2011 http://rangrez.wordpress.com/2011/01/24/sip-trunking-and-least-cost-routing-come-into-their-own/