VoIP provider operation

[NightShift]

Hi,

I'm looking for more information on how VoIP providers actually work. There are several conflicting ideas presented on the websites which are probably aimed at providing the reader with a simplistic overview, but I'm interested in learning more about the details.

Specifically, in order to get the "low low rates", what measures are taken? Im guessing that agreements with other ISP's and the major providers of telecom services (Telkom, Neotel, MTN etc.) are in place. If I'm in Joburg and use my telkom line to call my neighbour, and then use my voip phone on my adsl line to call my neighbour (hypothetically speaking) how is the cheaper voip call fascilitated? I hope my question is clear >.<

If anyone has any links to whitepapers on this I would be keen to read them.

Thanks,
Mark

 

[gmza]

Mark - in any call there is an originating leg (from the dialling party) and the terminating leg (to the answering party). When a these two legs are on different networks, the network terminating the call charges the network originating the call a per minute termination charge. The originating network adds on their originating cost and profit and VAT and then bills the call to their client.

E.g.

Telkom->Telkom: national (retail) rate is R0.57+VAT per min
Example_VoIP_SP -> Telkom: national (retail) rate is R0.38+VAT per minute (made up of R0.28 termination payable to Telkom (wholesale) + R0.05 originating cost + R0.05 profit + VAT).

Note that the operator -> operator costs are regarded as "wholesale termination rates" and are therefore cheaper than what you would pay as an end-user/subscriber. These rates would typically be subject to a valid licence and millions of minutes of calls, rather than hundreds or thousands.