Least cost routing (LCR) is the practice of sending each call over the cheapest available carrier route for its destination. A routing system compares the dialed number against rate tables from several carriers and picks the lowest-cost route, often within limits set for quality, capacity or caller ID handling. Carriers and wholesale voice providers use LCR heavily, especially for international calls. Businesses meet it in two ways: indirectly, because their voice provider routes their calls this way, and directly, when they run several voice carriers and set routing rules in their own phone system or session border controller.
At a glance
- LCR picks a route per call based on the destination prefix and each carrier’s rate for that prefix.
- It is most valuable for international and long-distance traffic, where rates differ widely between carriers.
- Cheapest is not always best: low-cost routes can mean poorer audio, missing caller ID or failed fax calls.
- Many carriers and platforms combine cost with quality measures and fall back to another route if a call fails.
- Businesses can run LCR across their own carriers, but it needs current rate tables and ongoing tuning.
What problem it solves
The price of terminating a call to a given number depends on which carrier carries it. For a destination country or mobile network, one carrier may charge a fraction of another’s rate, and those rates move often. Sending every call through a single carrier means paying that carrier’s price for every destination, good or bad.
LCR solves this by choosing a carrier per call. With several carriers connected, the routing system sends each call to whichever offers the best rate for that destination at that time, within whatever quality or capacity rules apply. For a provider, that protects margin; for a business with heavy international calling and its own carrier relationships, it can lower calling costs.
How it works
Rate tables. Each carrier provides a rate card listing prices by destination prefix, such as a country code or a mobile network’s number range. These tables are loaded into the routing system and updated when carriers change rates.
Prefix matching. When a call is placed, the system matches the dialed number to the longest matching prefix in each carrier’s table and ranks the routes by cost.
Rules and limits. Pure price ranking is usually adjusted by rules: preferring carriers with better answer rates or call quality, excluding routes that do not pass caller ID, respecting capacity limits on each trunk, or keeping certain traffic, such as emergency calls, on specific carriers.
Failover. If the first-choice route is busy or the call fails, the system tries the next route in the list. This adds resilience, though repeated failures add delay to call setup.
Where it runs. Carriers and wholesale providers run LCR in their switching platforms. Enterprises that run it themselves typically do so in a PBX, a session border controller or a dedicated routing service, with multiple SIP trunks or a bring-your-own-carrier setup on a cloud phone platform.
Measuring results. Call detail records show which route each call took, what it cost and whether it connected, which is how routing rules get tuned over time.
For more on choosing voice carriers and trunk services, see our SIP trunking solution page.
When it matters for buyers
- Heavy international calling. Rates differ most between carriers for international destinations, so LCR has the most effect there.
- Running more than one voice carrier. If you already have multiple trunks, routing rules decide whether you benefit from the price differences.
- Call quality or caller ID complaints on certain destinations. Your provider’s routing choices may be the cause; ask how routes are selected.
- Caller ID and call authentication. Routes that strip or alter caller ID can affect how calls are labeled, including under STIR/SHAKEN in the US.
- Comparing per-minute pricing. Very low rates may depend on low-quality routes; ask what you are buying.
Questions to ask vendors
- How do you choose routes for our calls: by cost alone, or by cost combined with quality measures?
- Do you use different routes for different destinations, and can we see quality data such as answer rates by route?
- Is caller ID passed intact on all routes, including international ones?
- Can we require premium routes for specific destinations or call types?
- How do you handle fax and other non-voice calls on low-cost routes?
- If we bring our own carriers, does your platform support routing rules by destination, cost and failover?
How it differs from bring your own carrier
Bring your own carrier (BYOC) and LCR both concern which carrier carries your calls, but at different levels. BYOC is an arrangement that lets you connect your own chosen carrier or carriers to a cloud phone or contact center platform instead of using the platform’s built-in calling. LCR is a per-call routing decision that picks the cheapest suitable route among the carriers available. BYOC can make enterprise LCR possible by giving you several carriers to choose between, but it does not route calls by cost on its own.