Colocation cross-connect price disparities remain between United States and Europe

26 Feb 2015

New data from TeleGeography’s Colocation Pricing Service reveal that fibre cross-connect prices have showed little movement between H2 2013 and H2 2014, and that they remain far higher in the US than in Europe.

Among the North American markets surveyed by TeleGeography, the median cross-connect price is USD300 — more than five times the USD58 median price in Europe. Despite the higher price of cross-connects, the average two-year lease price of a cabinet with one cross-connect and a power density of four kilowatts in the two regions is similar. For example, such a configuration would cost an average of USD1,499 per month in Amsterdam, and just 15% more, or USD1,731 per month, in Dallas. While the total prices are comparable, the cross-connect accounts for 18% of the cost in Dallas, but just 3% in Amsterdam, where energy accounts for a larger share of the price.

The impact of cross-connect prices is far greater in configurations that require multiple cross-connects. The average monthly price of a cabinet with five cross-connects in Dallas is USD3,001, or 80% higher than the USD1,662 price of a comparable configuration in Amsterdam. Expanding from one to five cross-connects drove the total rental price up by 73% in Dallas, but by only 11% in Amsterdam. In this configuration, cross-connect charges account for 53% of the cost in Dallas, compared with just 12% in Amsterdam.

‘In a growing battle for leverage in the colocation market, some operators have focused squarely on reducing, or even eliminating, cross-connect charges to gain a pricing advantage over competitors,’ said TeleGeography analyst Jon Hjembo. ‘Ultimately, however, colocation does not have the same perceived value from one facility to the next, and price differences persist due to the influence of well-established data center ecosystems, which tend to command higher prices.’

TeleGeography’s Colocation Pricing Service provides in-depth pricing data and expert analysis for 31 major colocation markets around the world.

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

http://www.telegeography.com/research-services/colocation-pricing-service/index.html