VoIP vs LCR - are the options of SoHo's and SME's limited?
Author: Gregory Rood | Date: 11 August 2009 13:45
In the current financial climate, smaller businesses – broadly known as SoHo’s (small office/home office) or SME’s (small to medium enterprises) – are considering all available options in order to reduce their monthly expenditure. One of the most easily identifiable cost-saving centres is that of telephony - due to the fact that the monthly usage and costs are measurable. The effect of cost-saving strategies implemented into this area can be monitored over time and compared to costs incurred before the strategies were implemented.
Traditionally, this strategy would include Least Cost Routing (LCR) which is, essentially, a basic process whereby the cheapest way to route the phone calls made by businesses is found. The savings made through the implementation of this process are scalable – and the more calls that a business makes each month, the greater the potential savings will be. The re-routing of the call occurs when the PABX (private automatic branch exchange) examines the call and establishes which network (i.e. Vodacom, CellC, MTN or Telkom) it is intended for, and redirects the call to the relevant cellular router – which then dials the number and the call is made via the lowest-cost carrier available. The router carries a standard cellular phone SIM card, and will only make one call at a time – which enables businesses to control the number of outgoing routers based on their individual needs.
An alternative strategy that has been driven by telecom providers is that of Voice over Internet Protocol (VOIP), which is the use of a normal Internet connection for the transmission of voice. For SoHo’s and SME’s, the use of VOIP as a cost-saving solution is not as viable as LCR due to the fact that the current process of call routing via VOIP does not represent the least cost route – and the user ends up spending much more money on data bandwidth than they actually need to for this purpose. In addition, the quality of the call can be compromised due to the fact that Internet Service Provider networks are inherently unreliable; whereas cellular LCR calls travel nationally and internationally on compressed data circuits which are less likely to reduce the quality of the communication.
Although VOIP has been driven by the large telecom providers in the country, the availability of LCR opportunities seems to be on the rise – and SME’s and SoHo’s are currently finding that cellular LCR is much more feasible in terms of long-term viability and sustained monthly savings on telephony.
To find out which solution is best suited for you and your business, contact Talking Telecoms today for a detailed analysis.
086 123 TALK or email sales@talking.co.za
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