Voice termination services allow the routing of calls through multiple networks to their destination. As the voice sector has grown, this has come to encompass not just PSTN calls, but also calls which originate online. While wholesale carriers tend to offer the entirety of their network for use, some other providers (sometimes known as retail carriers) offer only part of their network, or do not offer their network for routing calls from other providers at all.

With the increase in the uptake of VoIP (Voice over Internet Protocol) technology, voice services have become more and more integral to business. VoIP services offer reduced costs in calling abroad and the potential to eliminate costly geographical boundaries. As such, voice termination has become a hugely important factor within the telecoms sector, and one that looks set only to grow further in coming years.

The barriers to entry to the voice space are also steadily being eliminated. While once it might have been prohibitively expensive and time-consuming for a carrier to interconnect with another international service elsewhere in the world, now it is a relatively inexpensive operation that takes mere days to complete.

The hardware required is fairly inexpensive compared to that which was necessary before VoIP became prevalent, and much of the necessary infrastructure is already in place. The advent of VoIP has significantly reduced expenses across the board, and as the technology improves over time, the costs involved are set to shrink still further.

Wholesale Voice Termination Around the World

The advent of VoIP technology and its general uptake has resulted in lower prices for voice termination all around the world. Some countries, however, have benefited more than others. Low-cost calling is now a readily-available option in most of Europe, as well as North America and Canada. Most large businesses now routinely make use of VoIP to provide enhanced customer service, as well as to reduce the costs of both domestic and international calls.

Calls that might once have been prohibitively expensive are now affordable, enabling companies to trade around the world with significantly fewer barriers and difficulties. Just as the growth of the internet has shrunk the distance between different cultures, so too has the swift reduction in voice termination rates.

Voice termination rates in certain countries, however, remain higher than one might expect, given market forces. Often this is due to regulation by governments or lobbying by local telecoms operators. In these cases, the higher termination rates are often driven by profit. By charging more to route calls through the network than it actually costs, operators open up a revenue stream; one that they are unwilling to sacrifice for the sake of removing barriers to communication and increasing trade and connectivity. This is a prominent issue in the Middle East, in addition to a small number of African and Asian countries.

The best voice termination providers are able to mitigate the higher voice termination costs in these and other countries by negotiating with local telecoms operators to achieve a more favourable rate for calls terminated using their networks. This is where the expertise, experience and existing connections of wholesale termination providers can really make a difference. These operators are able to keep termination costs low enough to represent a viable and attractive proposition for businesses that wish to operate across international boundaries.

The Future of VoIP

As technology develops, wholesale termination rates are likely to fall considerably further, with some parties arguing vocally that rates should be reduced to zero (or near zero) in order to encourage competition within the voice sector and to remove barriers to entry to the industry. Although the removal of voice termination rates is unlikely to become a reality for some time, governmental bodies around the world are imposing increasingly strict limitations on the maximum voice termination rates in their home countries.

Many businesses are already aware of the benefits that a VoIP system can bring to their business, with device integration, strict quality of service parameters and detailed reporting becoming the norm. In addition to providing a high-quality stable service, providers that make use of VoIP technology can also offer a range of supplementary services designed to suit business needs, from automated responses to priority call routing. As the technology improves still further VoIP is likely to become the norm, further encouraging a reduction in termination rates.

New technology and a steady increase in network traffic is, however, likely to complicate voice termination in the future. Fortunately, experienced service providers such as IDT are working constantly to maintain relationships with local and national exchanges, drive down costs and increase footprints. With the potential for so much growth in the future, wholesale termination is set to well and truly break down the boundaries of communication and make the world a smaller, more connected place.