Before we discuss about the role of least cost routing for a profitable VoIP business, it is important to understand the basic role of routing in VoIP business. Routing is the process of transmitting VoIP traffic from one destination to another. To establish a successful VoIP business, routing plays a vital role as it is an outright indicator of how effectively you can terminate the calls in different destinations. In doing so, you will have to interconnect with various PSTN termination providers.
It is always best to have more than one termination provider for each destination so that you can route the call through the most cost-effective and best quality termination gateway. However, to route the call in such a manner your softswitch solution should support advanced routing types such as LCR (least cost routing) and percentage based routing.
LCR is one such advanced routing type which picks up the most cost-effective termination gateway among the list of available termination gateways for a given destination. Therefore, you get to make huge profit margins. By having LCR configuration in your softswitch solution, you can continue to route calls through the most cost-effective termination gateway with decent voice quality. In case, you want to go for a much better voice quality then you can manage the available gateways from the back end control panel of softswitch solution in such a way that the best quality termination gateway is always selected. This way, least cost routing becomes a major contributing factor for profitable VoIP business.