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Colocation cross-connect prices vary greatly between US, Europe

15 Jul 2014

Total colocation prices, and the prices of individual components such as power, cabinet installation, and connectivity, can differ greatly from one market to the next. New data from TeleGeography’s Colocation Pricing Service reveal that fibre cross-connect prices are a particularly significant contributor to differences between colocation prices in the US and Europe.

A company seeking to rent a cabinet with a power density of four kilowatts and one fibre cross-connect for two years would pay an average of USD1,800 per month in European metro areas surveyed, and USD1,700 per month in North American metro areas covered. While the total prices are similar, the cross-connect accounts for 17% of the average price in the US, compared to just 4% in Europe, where charges for power, space, and cabinet installation account for a larger share of the cost.

While the average cost of a cabinet with a single cross-connect is modestly lower in the US than in Europe, the economics can be quite different for configurations requiring multiple cross-connects. The average cost of a cabinet with five cross-connects in the US is USD2,860, compared to USD2,120 in Europe. Cross-connect charges account for 50% of the cost of this configuration in the US, compared with just 17% in Europe.

Cross-connects can have a disproportionate impact on prices in markets with relatively inexpensive space and power. For example, in Dallas, which has among the lowest power prices of markets surveyed, the average price of a cabinet with five cross-connects is USD2,828 per month, 77% higher than a cabinet with just one cross-connect. Conversely, in Oslo, where cross-connect charges are far lower, a cabinet with five cross-connects costs USD1,747 per month, just 10% higher than the price of a cabinet with one cross-connect.

‘European colocation providers usually charge more for power than their US counterparts, but US colocation providers typically charge significantly higher cross-connect fees,’ said TeleGeography analyst Jon Hjembo. ‘Consequently, buyers needing only one link to the meet-me room will find that colocation costs are modestly lower in the US than in Europe, while companies with greater connectivity requirements will encounter significantly higher costs in the US than in Europe.’

TeleGeography’s Colocation Pricing Service provides in-depth pricing data and expert analysis for 32 major colocation markets around the world.

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