Asian circuit prices slide, Trans-Atlantic prices stabilise

7 Jun 2010

New data from TeleGeography’s Wholesale Bandwidth Pricing Database reveal that capacity costs five times more on key trans-Pacific and intra-Asian routes than across the Atlantic. Carrier prices for a 10Gbps wavelength lease ranged from USD9,000 to USD20,000 per month between New York and London; the same product cost between USD65,000 and USD80,000 per month between Tokyo and Los Angeles.

For many years, submarine cable operators have charged far more for circuits connecting to Asia than Europe, but this gap is narrowing. A recent wave of network construction and upgrades in Asia and Pacific has brought renewed pricing pressure to those markets. 10Gbps wavelength prices between Los Angeles and Tokyo have fallen at a compounded annual rate of 21% over the past two years, and prices from Singapore to Tokyo have plummeted by nearly 50% in the past year. Conversely, prices for 10Gbps wavelengths between New York and London have fallen at a compounded annual rate of only 3% — unusually stable, by the standards of the bandwidth market.

TeleGeography Research Director Rob Schult noted that conditions in Asia are ripe for further price erosion. Google and five carriers have just completed construction of the trans-Pacific ‘Unity’ cable, and additional cables are planned for East Asia. ‘We don’t expect that circuit prices in Asia will ever reach the exceptionally low levels seen in the Atlantic, but it’s certain that new cable construction in Asia and the Pacific will pull down prices,’ said Schult.

TeleGeography’s Wholesale Bandwidth Pricing Database has been a vital resource for bandwidth buyers, sellers, and investors since 2002. Our database provides more than 150,000 anonymous carrier price quotes on more than 160 critical routes for bandwidth products ranging from E-1 to Gigabit Ethernet and 10Gbps wavelengths.

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TeleGeography’s Wholesale Bandwidth Pricing Database