Least cost routing (LCR) is the switch logic that sends each call to the cheapest available carrier for the dialed prefix, then tries the next cheapest if the call fails. In practice, good LCR also checks quality, so a cheap route that loses calls is skipped before it costs you more than it saves.
How LCR works
- Your switch loads the rate decks of every carrier you buy from.
- For each call it finds the longest matching prefix in each deck.
- It sorts the carriers by rate for that prefix.
- It sends the call to the first carrier. If that carrier rejects the call with a failure code, the switch tries the next one (this is called failover or rerouting).
Most softswitches used in wholesale voice support this out of the box. The work is in keeping rates current and setting good rules.
Why pure price ordering fails
The cheapest route is often cheap for a reason: lower answer rates, wrong CLI, longer post-dial delay or short calls. If the switch always tries it first, you pay for the failed attempts in lost customers and time. Some quality problems do not even trigger failover, because the route answers the call: false answer supervision and short duration calls look like success to the switch.
Quality based LCR
Most carriers combine price with quality rules:
- Thresholds: drop a route from the list when its ASR or ACD for a destination falls under a set value over the last hour or day.
- Percentage split: send 70% of traffic to the best value route and 30% to another, to keep both warm and compare them.
- Priority by customer: premium customers get premium routes first; price sensitive customers start with cheaper routes.
- Blocked codes: keep high risk prefixes off cheap routes to limit revenue share fraud.
Measuring quality per route needs good CDR monitoring. See monitoring route quality with CDRs and ASR, ACD and PDD.
Failover rules
Not every failure should be retried. A busy subscriber or an unallocated number will fail on every route, and retrying only adds delay and attempts. Common practice is to reroute on carrier side errors (no capacity, timeouts, server errors) and not on user side results (busy, no answer, invalid number). Limit the number of attempts per call, often to 2 or 3, so post-dial delay stays acceptable. See post-dial delay causes.
An example
Three carriers sell the same mobile breakout at 0.010, 0.012 and 0.015 per minute. Pure LCR sends every call to the first. If its ASR drops from 45% to 25% in the evening, a quality rule removes it from the top until it recovers, and calls go to the second carrier. You pay a little more per minute for those hours but keep your answer rate and your customers.
Keeping LCR accurate
- Load rate changes before their effective date; an old rate in the switch means routing on the wrong numbers.
- Check capacity: the cheapest route is useless if its channels or CPS are already full.
- Review margins by destination weekly, comparing what you buy against what you sell.
Adding routes to your LCR
LCR only works if you have more than one good route per destination. VoIPMatcher can source additional VoIP termination routes for the destinations where you need more options. Request a voice route for your main destinations.
Frequently asked questions
What does LCR mean in VoIP?
LCR stands for least cost routing. In VoIP and telecom it is the logic in a softswitch that compares the rates of every carrier for the dialed prefix and sends the call to the cheapest suitable one, retrying the next on failure. It is unrelated to the least cost path algorithms taught in computer networking courses.
What software supports least cost routing?
Most softswitches used in wholesale voice, often called class 4 switches, include LCR, and many PBX and call center platforms offer simpler versions. All of them depend on current rate decks, prefix matching and quality rules; the software only works as well as the rates and thresholds you load into it.
How often should LCR rates be updated?
Every time a supplier sends a new rate deck, and always before its effective date. Carriers update decks often, sometimes weekly, and increases normally apply after a contract notice period. An old rate left in the switch means calls are routed on the wrong numbers and margins disappear without anyone noticing.
Does least cost routing lower call quality?
Pure price ordering often does, because the cheapest route is frequently cheap for a reason: lower answer rates, missing caller ID or longer post-dial delay. LCR with quality thresholds avoids most of this by dropping a route when its ASR or ACD falls, so you save money only while the route performs.
What is LCR in a business phone system?
In a business PBX, LCR means choosing between the company's own trunks or providers by cost, for example sending international calls through a cheaper VoIP provider and local calls through another. The idea is the same as in wholesale voice, but with a few routes and simple rules instead of thousands of prefixes and rate decks.
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