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US, Europe colocation pricing models vary significantly

24 Sep 2013

New data from telecom market research firm TeleGeography reveal that fiber cross-connect costs play a much more significant role in colocation pricing in the U.S. than in Europe. Cross-connects in the U.S. can cost upwards of six times as much as in Europe.

However, despite this enormous price differential in cross-connect services, overall colocation rental costs in major cities in the U.S. and Europe are similar. According to TeleGeography’s Colocation Pricing Service, a company seeking to rent a cabinet with a power density of 4 kilowatts and one fiber cross-connect would pay between $1,500 and $2,000 per month in 13 of the 15 metro areas surveyed in the U.S. and Europe. Cost differences between the two regions become apparent when scrutinizing individual rental components such as installation, power and space, and connectivity.

For example, colocation service providers in Miami charge an average of $1,104 for a cabinet with 4 kilowatts power density and one fiber cross-connect. However, fiber cross-connects in Miami cost an average of $322 per month, accounting for more than 30 percent of the monthly cost of a cabinet. By contrast, in London, the most expensive colocation market surveyed, the price of a cross-connect averages $58 per month, accounting for less than three percent of the $2,269 average monthly cost of a cabinet.

“Operators surveyed charge between $251 and $322 for a fiber cross-connect in colocation facilities in the U.S., but only $33 to $59 per month in Europe,” said TeleGeography analyst Jon Hjembo. “Colocation providers in the U.S. see connectivity as a part of their revenue stream, while operators in Europe rely more heavily on space and power charges to generate revenues.”

TeleGeography’s Colocation Pricing Service provides in-depth pricing data and expert analysis for 20 major colocation markets around the world.

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TeleGeography’s Colocation Pricing Service

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