Trans-Pacific wholesale circuit prices have plummeted over the last two years due to growing competition, research by TeleGeography shows.
The median monthly lease price of a 10Gbps wavelength between Los Angeles and Tokyo fell to $36,000 (€25,129) in Q2, down 63% from Q2 2009. The price of similar links between Los Angeles and Singapore, and Hong Kong to Los Angeles have fallen 33% and 39% respectively in the past year alone.
Price drops have been driven by construction of three new trans-Pacific subsea cables since 2008 – the Asia-America Gateway, Trans-Pacific Express, and Unity links.
But TeleGeography analyst Greg Bryan predicts price erosion will soon slow down. “Trans-Pacific bandwidth demand is growing rapidly, and carrier’s need for diverse and redundant capacity ensures that bandwidth purchases will be distributed across multiple systems.”
Price declines will fall back to be in line with historical trends in coming years, he said, “barring new shocks to the market.”