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The de-regulation of the telecommunications industry since the 1980s has had a number of effects, amongst them a significant reduction in international call charges to the subscriber. This is made possible by the growth of alternative telecoms routes and a business process called Least Cost Routing. This article explains the historical background to this process.

Background: International Telephone Traffic Before De-regulation

Before deregulation most telephone companies were owned or regulated by their governments and even those countries with many domestic phone companies usually had one or at most two international carriers. The UK had British Telecom and Cable and Wireless while the USA had AT&T and Sprint; in France, Germany, Spain and most other countries the national telephone company was also the international carrier. Upgrade devices or change rate plans using My Account. These companies used settlement routes to handle traffic between them: for instance BT would terminate calls for the UK from Telstra in Australia, Telstra would terminate calls sent by BT for Australia. They would charge each other at the relevant settlement rate - usually in the range of $0. 50 - $2 per minute - but they would settle net: if BT had sent more minutes to Telstra than vice-versa, BT would pay at the settlement rate for the excess minutes not the total minutes. If the traffic balanced, neither company would pay the other anything.