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Competition is driving down VPN prices

12 May 2011

In response to growing demand for IP virtual private network (VPN) services, carriers have expanded their international enterprise network footprints. New data from TeleGeography’s Enterprise Network Pricing Service show that this increased competition is driving down IP VPN prices in markets around the world.

In Q1 2011 the median monthly lease price of a gigabit Ethernet (GigE) VPN port in Hong Kong fell 32% to USD51,286 per month. In Singapore, the price fell by 20% to USD48,706. VPN port prices in western Europe, although considerably lower than in Asia, also continue to fall. Median GigE VPN port prices in Amsterdam tumbled 50% in early 2011, to USD13,284 per month.

‘The recent steep declines in median prices reflect two factors,’ observes TeleGeography Analyst Brianna Charpentier. ‘New competitors offering lower prices have recently entered these markets. In turn, the increased competition is compelling established service providers to cut their service prices, sharply driving down the industry median.’

TeleGeography’s Enterprise Network Pricing Service is a detailed and up-to-date source of pricing data and expert analysis of pricing trends for international IP VPN, retail private line, and Dedicated Internet Access (DIA).

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