Long-Haul Bandwidth
Prices Stabilizing on Key Routes

After years of rapid declines, long-haul bandwidth prices on many major routes have stabilized—and even risen—in recent months, according to new research published in TeleGeography's Bandwidth Pricing Database.

by ISP-Planet Staff [October 10, 2002]

On the world's busiest international communications route, New York to London, monthly lease prices for 155 Mbps circuits have increased slightly each month since April 2002.

Over the same period, bandwidth prices for most major U.S. domestic routes have experienced only small declines of two to four percent, with price increases in a few cases (below).

The median market price for a 155 Mbps monthly lease on the Atlanta to New York route, for example, increased 4.6 percent.

Why are many of these densely supplied and well-established routes experiencing price stabilization?

First, some of the most aggressive carriers are no longer competing across the same range of markets due to restructuring; and second, price is no longer the primary consideration of bandwidth buyers. Some of the most established carriers have taken advantage of their clients' renewed interest in stable supplier relationships in order to raise prices.

Not all routes are stabilizing, however. Price erosion has continued unabated on many intra-Asian and trans-Pacific routes, where new submarine cables have or will be coming online in the near future.

Monthly wholesale bandwidth prices are based on 12-month lease excluding install fees. Based in Washington, D.C., TeleGeography, has been publishing international telecom statistics and analysis since 1989.

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