The gap between Pacific and Atlantic bandwidth prices is narrowing as a result of fresh cable capacity, but trans-Atlantic prices are still the cheapest, according to research firm TeleGeography.
It says its latest research shows that capacity still costs five times more on key trans-Pacific and intra-Asian routes than across the Atlantic, despite declines in the cost of 10Gbps wavelength prices.
Prices between Los Angeles and Tokyo have fallen at a compounded annual rate of 21% over the past two years, and prices from Singapore to Tokyo have sunk by nearly 50% in the past year.
Despite the falls, carriers still pay less for 10Gbps wavelength between New York and London – typically around $9,000-$20,000 (€7,535-€16,743) per month -, compared to $65,000-$80,000 between Tokyo and Los Angeles.
“Prices for 10Gbps wavelengths between New York and London have fallen at a compounded annual rate of only 3% — unusually stable, by the standards of the bandwidth market,” TeleGeography said.
However, the rollout of the Google-backed Unity cable, the AAG and other systems is reducing the gap.
“We don’t expect that circuit prices in Asia will ever reach the exceptionally low levels seen in the Atlantic, but it’s certain that new cable construction in Asia and the Pacific will pull down prices,” said research director Rob Schult.