While 10Gbps wavelengths comprise the majority of international capacity sales, new data from TeleGeography’s Wholesale Bandwidth Pricing Database demonstrate a financial incentive for customers with extremely high bandwidth requirements to purchase 100Gbps wavelengths. Median 100Gbps prices on key international routes are, on average, seven to eight times the price of comparable 10Gbps service, despite providing ten times the capacity. Furthermore, as 100Gbps technology is deployed more widely, prices are falling. Between Q2 2014 and Q2 2015, median prices on key international routes fell an average of 16%.
However, price levels vary by region and between terrestrial and subsea deployments. Upgrades to 100Gbps equipment on terrestrial networks have been rapid in recent years as bandwidth demand has increased, and European and intra-US terrestrial routes exhibit the lowest 100Gbps prices globally. Between Q2 2014 and Q2 2015, median prices on the Frankfurt-London and Chicago-New York routes fell 24% and 12%, respectively, to USD12,412 and USD29,250 per month.
On longer subsea routes, where many providers are just beginning to offer 100Gbps service, wavelength leases are more expensive. In Q2 2015, the median 100Gbps price on the London-New York route was USD54,000 per month, after decreasing 16% over the past year. Meanwhile, the median price of a 100Gbps wavelength between Los Angeles and Tokyo fell 12% to USD110,000 per month.
‘As 100Gbps technology continues to mature and equipment costs decrease, network operators are able to pass along their cost savings to bandwidth buyers in the form of steady price declines,’ said TeleGeography analyst Brianna Boudreau. ‘The initial cost of purchasing 100Gbps capacity is daunting for many. However, where massive point-to-point connections are needed, economies of scale make this approach less expensive than purchasing incremental capacity upgrades over the long term. Customers can further benefit from a reduction in network complexity and the aggregate cost of required cross connects.’
TeleGeography’s Wholesale Bandwidth Pricing Database provides more than 270,000 anonymous carrier price quotes for over 250 key routes for bandwidth products ranging from 2Mbps E-1 circuits to 100Gbps wavelengths.
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