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Ethernet proves a cost-effective network solution, but price disparities remain

4 Jun 2013

Ethernet private lines provide a flexible, cost-effective alternative to legacy SDH/SONET technologies. Nevertheless, new data from TeleGeography’s Ethernet Pricing Service reveal that there are widespread geographic disparities in Ethernet over MPLS (EoMPLS) price levels and structures.

The lowest prices for point-to-point EoMPLS circuits are found on routes between major cities in Europe and the US, and on trans-Atlantic links. In Q1 2013, the median monthly price of a 10Mbps circuit was USD446 between London and Paris, USD896 from Los Angeles to New York, and USD652 from London to New York. Trans-Pacific and intra-Asian prices are significantly higher. In Q1 2013, the median price of a 10Mbps circuit was USD1,706 per month between Los Angeles and Tokyo and USD1,863 per month between Hong Kong and Tokyo.

Regional differences are also apparent when examining the cost associated with increasing capacity. On major terrestrial routes in Europe and North America, the median price of a 100Mbps EoMPLS circuit was approximately twice the price of a 10Mbps circuit, at USD948 per month between London and Paris and USD1,869 per month between Los Angeles and New York. Upgrading to 100Mbps circuits in Asia can be far more costly. The median price of a trans-Pacific 100Mbps EoMPLS circuit was USD6,613 in Q1 2013, about four times the price of a 10Mbps link, while the median Hong Kong-Tokyo 100Mbps price was USD8,258, or 4.4 times more than a 10Mbps circuit.

‘Ethernet prices and the multiples associated with upgrading capacity can vary dramatically by market,’ said TeleGeography analyst Brianna Boudreau. ‘Nevertheless, Ethernet provides a cost-effective solution for enterprises looking to purchase higher capacity services. Paying two to five times the price for ten times the Ethernet capacity equates to significantly less than paying the long-standing SDH/SONET multiple of 2.5 times the price for just four times the capacity.’

TeleGeography’s Ethernet Pricing Service benchmarks the price of long-haul and international Ethernet service by provider, capacity, service, and route.

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