In voice telecommunications, least-cost routing (LCR) is the process of selecting the path of outbound communications traffic based on cost.
In the de-regulated EU, these will be licensed alternative operators (e.g. Cable and Wireless / Colt in the UK or Jazztel in Spain) or the (PTT)'s of other countries, such as T-Systems (Germany), Telefónica (Spain), NTT (Japan) or Telstra (Australia), who establish offices or a point of presence (POP) in a major telecommunications hub city such as London, New York, Hong Kong or Amsterdam.
The major US carriers, Sprint, Verizon, AT&T and Level 3 in the US International telecommunications routes also have POPs in these hub cities.
There are also niche carriers which specialise in providing termination to a small number of destinations, sometimes through the use of grey routes.
Such agreements define terms of payment, methods and procedures of dispute resolution, and the means by which the carriers will notify each other of pricing changes.
Mobile number portability impacts the internet telephony, VoIP (Voice over IP) and Least Cost Routing (LCR) businesses.
MNP checks are important to assure that this quality of service is met; by handling MNP lookups before routing a call and assuring that the voice call will actually work, VoIP companies give businesses the necessary reliability they look for in an internet telephony provider.
Carrier B will sustain losses if it does not notice that its supplier, C, also defines that range as belonging to a mobile operator and charges a higher rate.
Such measurements are rarely used in production switching systems, in particular due to the necessity of voice samples at both ends.
LCR software varies from home-grown Excel spreadsheets, through Access and Microsoft Visual Studio applications to commercial products offering integration with the switch and billing systems costing up to £500,000 for an installation.