My first job in Storm, back in the late 90's was to add a Cellular LCR (Least Cost Routing)
product to the International LCR product offering Storm launched with. We were finding that we were losing deals to the likes of Orion and Telepassport because we did not offer "savings on calls to cellular". TimWG's words to me were something of the order of "create a cellular product for us and just make sure you don't lose us any money".
None of us saw just how big the Cellular LCR market would be. None of us realised just how many more cellular phones than fixed line phones there would be by now.
Cellular LCR has always been a problem for the Mobile Network Operators. The GSM networks were traditionally designed quite "thin", with some base stations only being able to handle 8 or 16 simultaneous calls from phones "passing through". Installations of "SIM farms" or large Cellular Fixed Terminal CPE installations had the ability to "flatten" the networks in places. An installation at PriceWaterhouseCoopers succeeded in causing dropped calls for anyone traveling past their offices in Sandton for weeks after their LCR installation went live. The networks ended up spending many millions of capex to cater for LCR.
Much better money was being made in charging Telkom to terminate calls originating in Telkom's network to cell phones. But the fear of losing the LCR SIM business (and the traffic) to the other MNO network forced Vodacom and MTN to offer the likes of Storm attractive packages. Once the LCR market had tapered off however, we saw them beef up "off-net" call charges to try and make more margin. We had to become smarter about how we managed our base of SIMs.
Deregulation and the legalisation of VoIP has changed all of that. Anyone who is trying to sell you on the idea that traditional cellular LCR is here for many years and it is worth committing yourself to a long term contract is blowing smoke. The future is in aggregating traffic using either VoIP or once it is available a mix of CPS (Carrier PreSelect) and VoIP and passing traffic over interconnects. Renewing LCR SIMs from now on is risky business.
The way forward is with the new breed of Voice&Data Service Provider (the EC Act calls them Communication Service Providers), who are geared to make most use of the changes in technology and regulations. You just have to take a look at the M&A activity (traditional data guys buying voice guys, vice versa, and the likes of Vodacom starting their own ISP) to realise what Storm did years ago - the future is in IP. LCR will be around for a while yet, unless either DoC or ICASA force some unwise and rather radical changes to interconnect rates. The UK has one of the most competitive telecoms markets around, and cellular LCR is still alive with the likes of Westlake and True Communications.
Peter Walsh of DataRoom has written a good article on LCR on MyDigitalLife - worth a read if you're interested in a balanced outlook on this market.


are actually intelligent things. Most of the time (as was observed by one wit in the chamber the other day) one could make use of the resulting hot air to help Eskom out of their energy crisis. And then there are times when comments are made that are breathtakingly and gob-smackingly straight from the other side of Lewis Carrol’s looking glass!
It is vital that we define the markets (after all, it determines just how level the playing field is) as best we can in order to then agree on the rules that we will play by.


