IP VPN price differences persist despite widespread declines

2 Apr 2013

New data from TeleGeography’s Enterprise Network Pricing Service reveal that, between Q1 2012 and Q1 2013, prices of T-1 and E-1 MPLS IP VPN ports fell 12% globally, with average regional declines ranging from 4% in the Middle East to 17% in Africa. While prices are coming down around the world, they continue to vary significantly by region, and within regions.

The lowest IP VPN port prices are found in the US and Europe. Median T-1 VPN port prices in major US cities ranged from USD234 per month in Los Angeles to USD251 per month in Atlanta in Q1 2013. Median VPN service prices are unusually homogenous across major US cities, and buyers will find far broader price ranges in other regions. While median monthly E-1 VPN port prices in most major western European cities fall within the narrow range of USD313 in London to USD340 in Amsterdam, prices can be as much as six times higher in cities in eastern Europe and the Balkans.

VPN port prices in major Latin American cities are higher than prices in the US, but relatively competitive by global standards, ranging from a median of USD591 per month in Guadalajara to USD1,120 in Guayaquil. The range of prices in East Asia is far broader, ranging from USD418 per month in Singapore to USD4,663 in Hanoi.

VPN service in the Middle East and Africa remains very expensive. While the median price of an E-1 port in Jerusalem is USD648 per month, prices in other Middle Eastern cities are far higher, ranging from USD6,532 in Manama, Bahrain to USD18,650 in Beirut. Median E-1 VPN port prices in African cities ranged from USD3,128 per month in Cairo to a staggering USD26,613 in Douala, Cameroon.

‘Enterprise services remain expensive, and price differences vast, in markets with low levels of connectivity and competition,’ said TeleGeography analyst Brianna Boudreau. ‘However, as transport costs to emerging markets such as the Middle East and Africa fall, it will enable carriers to expand their IP VPN networks more cost-effectively, translating to lower, more consistent regional pricing in the coming years.’

TeleGeography’s Enterprise Network Pricing Service provides detailed data and analysis of prices for international IP VPN, retail private line, and Dedicated Internet Access (DIA) services.

To speak with an analyst, please call +1-202-741-0042 or email press@telegeography.com.