The telecom boom—and the subsequent bust—has littered the landscape with renamed sports arenas, empty office parks, and a seemingly limitless amount of fibre-optic network capacity. While falling prices and overcapacity continue to plague the industry, new research by TeleGeography suggests that demand growth has begun to outpace price erosion on many city-to-city routes.
According to TeleGeography’s recently released title ‘International Bandwidth’, prices on most long-haul routes in the US and Europe fell by 10% to 30% in 2003, while new deployments of Internet capacity—the key indicator of bandwidth demand—-increased almost 60%. For example, while average prices for a 155Mbps circuit from London to Paris fell 89% between 1999 and 2004, London’s cross-border bandwidth demand grew by almost 1,700% during the same time period.
“Revenues aren’t necessarily skyrocketing,” said TeleGeography analyst Stephan Beckert. “However, these new data do suggest that bandwidth demand is strong enough to offset recent price declines.”
To learn more about global bandwidth supply, demand, and pricing, see International Bandwidth, available now from PriMetrica’s TeleGeography Research Group.