IP transit prices fall sharply

As services providers transition to higher-capacity ports, the unit price they pay for transit has fallen sharply. IP-transit prices have dropped below $1 (€0.72) per Mbps for high-volume transactions in major markets, according to a new report from TeleGeography.
The median price for a GigE port in London, which in 2008 was $13 per Mbps, is now just $1.50 per Mbps for a 10 GigE port. The firm noted that while median GigE and 10 GigE port prices have dropped 28% and 30% per year, respectively, over the last five years, buyers transitioning between the two technologies have obtained a decrease of 35%.
Similar trends are seen worldwide. In Hong Kong GigE and 10 GigE prices fell 15% and 26%, respectively, but a customer making the transition between the two would see a price decline of 28%, and pay around $7 per Mbps for the 10 GigE port. In New York GigE prices fell 24% over the past five years while 10 GigE prices fell 27%. Customers moving from a GigE port bought in 2008 to a 10 GigE port would experience a slightly greater price decrease of 31%, paying the 2013 median price of $1.71 per Mbps.
“The rapid decline in price per Mbps may appear alarming, but the total price of a large port still runs thousands of dollars per month,” said TeleGeography analyst Erik Kreifeldt. “At $1 per Mbps, the price of a full 10 GigE port is $10,000 per month. Furthermore, robust demand growth helps neutralize the effects of price erosion on IP transit revenues.”

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.