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LCR (Least Cost Routing)

Least Cost Routing (LCR) is a telecommunications term referring to the process of selecting the most cost-effective path for routing phone calls or data transmissions.

This process is used by telecom carriers, VoIP (Voice over Internet Protocol) providers, and large enterprises that handle a significant volume of calls or data traffic. 

  • Cost Optimization: The primary goal of LCR is to minimize the cost of transmitting calls or data. This is achieved by analyzing various route options and selecting the one with the lowest cost while maintaining acceptable quality standards.

  • Dynamic Routing: LCR systems dynamically assess the cost of routes based on current rates, which can fluctuate based on time of day, call destination, and carrier pricing changes. This ensures that the most economical route is chosen in real-time.

  • Quality Considerations: While cost is a primary factor, LCR also considers the quality of service. Factors like latency, jitter, and packet loss are important, especially for services like VoIP.

  • Multiple Carrier Options: LCR is used in environments where there are multiple carrier options available for routing calls or data. The system evaluates these options to determine the most cost-effective path.

  • Automated Decision-Making: LCR is typically automated through software algorithms that rapidly analyze available routing options, making it a seamless process.

Least Cost Routing is a strategic approach to managing telecommunications costs, providing businesses with a method to optimize their communications expenses while maintaining quality and efficiency in their services.

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