Least-cost Routing - Telecoms Carriers As Suppliers and Customers

Telecoms Carriers As Suppliers and Customers

Telecoms carriers often buy and sell call termination services with other carriers. A carrier such as Telewest or France Telecom will be interconnected with other telecoms carriers and might have a number of routing options of different price, quality and capacity to a given country. 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 Global Crossing in the US 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.

"Trading" in the telecom carrier-carrier market is very different than the "trading" conducted in financial markets by brokers and banks. Whereas brokers and banks may buy and sell the same stocks or bonds with each other in the same day, carriers have to be very careful not to do so. For example, if carrier A buys USA from carrier B who buys it from A, one call will come in to carrier A, go to B and go back to A again, over and over until all the circuits are taken up with one call. If it does terminate on an overflow route, the carriers may bill each other many times over for the same call. This is called looping and is very undesirable.