Data from TeleGeography’s Enterprise Network Pricing Service reveal that MPLS IP VPN port prices are declining rapidly in major cities around the world. Between Q3 2010 and Q3 2011, median port prices in competitive regional markets, such as the U.S. and Europe, decreased by more than 25 percent. Price declines were more modest in Latin America and Asia, but still exceeded 10 percent. Prices of high capacity ports, such as 155-Mbps STM-1/OC-3, 100 Mbps FastE, and 1,000 Mbps GigE ports, are falling particularly rapidly in competitive markets.
VPN port prices are even falling in Africa, long one of the world’s most expensive markets for corporate data services. The sharpest price declines were in Cairo, where the median price of best efforts 2-Mbps (E-1) VPN ports fell 33 percent to $5,514 per month, and in Casablanca, where E-1 prices declined 23 percent to $8,067 per month. Africa remains a very diverse and fragmented market, however. Median E-1 port prices in Lagos declined only six percent, to $10,620 per month.
“Falling VPN prices reflect a number of factors,” said TeleGeography Research Director Rob Schult, "These include price reductions by established carriers, the emergence of new competitors with more aggressive prices, and efforts by multinational carriers to accommodate local market conditions.”
TeleGeography’s Enterprise Network Pricing Service provides detailed and current data and analysis of prices for international IP VPN, retail private line, and Dedicated Internet Access (DIA) services.
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