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How international Calls work

arab talking

In order to understand our business model, we first need to explain the basics.

How does a phone call reach the recipient?

There are no fix pathways for telephone calls to be routed through. The reality more looks like the internet. Each call is routed on a "least cost" basis.  Let us look at a young egyptian man calling from his mobile in Egypt to a friend at a mobile phone in Peru.

The call can go like this (the Route):

Call Progress

The Egyptian calls via his Egypt mobile carrier "A". So his phone connects to "A". But "A" does not send the call directly to the Peruan mobile carrier, because it does not have many calls to Peru and therefore no agreement with that carrier.

So "A" looks into its electronic price-list for the cheapest connection and forwards the call to the Spanish carrier "B" where they have good prices. "B" has a subsidiary in Brazil (C) and this subsidiary has a good relationship with the mobile carrier “D” in Venezuela. So "B" forwards the call to "C" which sends it to "D" and "D" finally transmits the call to the mobile phone in Peru.

That is the technical process. In reality there can be a lot more carriers in between, but more about that later.

How and where does the money flow?

D is the mobile carrier in Peru and sends the call to the mobile phone of the receiver. It has to maintain a network infrastructure and transmission masts, etc. For transmitting the call it bills an amount per minute, (the "interconnection fee") to the brazilian carrier C.

C and B are just forwarding the call and do not need to maintain external infrastructure. They have a lot less costs and therefore do not get much money for forwarding. So they each add a small amount for this transportation service and "B" bills the Egyptian carrier "A".

"A" also has to maintain a network infrastructure and transmission masts, etc. and adds a bigger part to the final invoice going to the Egyptian caller.

Of course this example is oversimplified. There usually are a lot more carriers in between.

How are prices be defined?

Every carrier has contracts with many other carriers, often there are more than thousand contracts. In each contract the prices for all the offered destinations are listed - and these prices change at least monthly.

When a call arrives at a carrier's system, the carrier’s computer checks its list of destinations (defined by the called number) and selects the cheapest way to forward the call. Since prices always change, every time our Egyptian calls his Peruan friend, chances are high that the call will be transported via a different route.

So how does kwak earn money? Read more on the next page.