Wholesale internet prices decline globally; vary sharply across regions

7 Oct 2008

While the world is growing ever more interconnected, new data from TeleGeography’s IP Transit Pricing Service reveals that the price of wholesale internet access (IP transit) continues to vary dramatically around the world.

Median monthly IP transit prices for 1,000Mbps Gigabit Ethernet (GigE) ports in major US and European cities ranged from USD10 to USD14 per Mbps in Q2 2008. IP transit prices in Asia remain far higher than in the US and Europe. Prices for GigE ports in major Asian cities in Q2 2008 ranged from USD30 per Mbps month in Seoul to USD45 per Mbps per month in Tokyo. IP transit service in Latin America is even more expensive, with median GigE port prices ranging from USD73 per month in Buenos Aires to USD86 per month in Santiago.

Wholesale prices around the world have been declining rapidly, due to competition and declining equipment and transport costs. Somewhat surprisingly, prices in the US and Europe are falling as fast as, or faster than, prices in many more expensive regional markets. For example, while GigE port prices in major US cities fell 30 to 40 percent between Q2 2007 and Q2 2008, port prices in Latin American cities declined a more modest 15 to 20 percent.

‘Disparities suggest that there is plenty of room for IP transit prices in Asia and Latin America to decline,’ commented TeleGeography analyst Erik Kreifeldt. ‘However, because prices in both the US and Europe are declining at least as fast as prices in higher cost regions, wide price disparities will likely persist for years to come.’

TeleGeography’s IP Transit Pricing Service is a comprehensive source of IP transit pricing data, with more than 130,000 price quotes, covering nearly 40 port configurations in over 40 major cities worldwide. To find out more, please visit http://www.telegeography.com/products/ip_transit/index.php, or contact us at: +1 (202) 741-0042 or press@telegeography.com

TeleGeography’s IP Transit Pricing Service