Long distance termination refers to the handing off or routing of calls to a provider other than your local phone company or Competitive Local Exchange Carrier (CLEC). Essentially, the service provider is serving as a clearing house for minutes. This is usually done using one of two methods.

Method 1: Switched Termination Services
Switched long distance (LD) service supports long distance calling over an existing local voice access, such as business lines or digital trunks. Switched LD service can be configured to support outbound long distance, inbound toll-free calling or both. This method often requires you to dial an access code such as the all to familiar 1010-220, or an 800 / 877 access number. Switched services have a higher rate due to the use of the local LEC for call origination.

Method 2: Dedicated Termination Services
Dedicated long distance call termination has a lower cost per minute due to the requirement of a dedicated DS1 – DS3 line to be installed although there is still a fixed loop cost for the line depending upon the size.

Traditional long distance voice call termination was typically provided via a large telecom carrier, such as Sprint, AT&T or MCI. When you had a business that did x minutes in LD, it was typically time to get a dedicated ds1/t1 or PRI from a LD carrier for the sole purpose of long distance. Some companies actually used multiple vendors. Businesses would configure their PBX’s with pricing tables. This would enable the phone system to do CCR (Custom Call Routing) throughout the day for the best rate to each dialed number.

What Are the Advantages of Call Termination?
The biggest incentive for choosing to terminate long distance calls through call termination services is cost savings. Currently, using traditional PBX systems, by default your long distance rates are locked in by your CLEC provider. These telecommunication companies essentially have a monopoly since they only have to compete against themselves. The reason why these larger companies do not go into this market YET is because they are enjoying this prosperity. VoIP cuts into their own revenue!

The biggest reason why companies do not use these types of services is because of lack of knowledge and certainty surrounding the technology. Although among carrier sized companies, many companies today do utilize these wholesale long distance prices. However, industry is moving in such a way that soon small to medium sized business will also be able to take advantage of these lower cost savings.