Good and bad news about bandwidth prices

Zardon · Oct 8, 2002, 09:11 PM

First the good news: Bandwidth prices are stabilizing on several key routes in Europe, the U.S., and across the Atlantic -- a trend that could help many battered service providers stay afloat. Now the bad news: Corporate users may have to kiss goodbye bargain rates on some popular routes.

After years of rapid declines, bandwidth prices on many major long-haul routes have stabilized and, in some cases, even risen, according to data published Monday by Telegeography Inc., a market research group based in Washington.

The price plunge has eased, for instance, on one of the world's busiest international routes, New York to London. And within the U.S. and Europe, prices on several popular routes have actually risen. The median price for a 155M bps (bits per second) monthly circuit lease on the Atlanta to New York route, for example, increased 4.6 percent, according to Telegeography.

Alexandra Rehak, director of European operations at Telegeography's London office, sees two factors for the new price development. "On the one hand, some of the companies that had offered very low prices are out of business, while others have pulled out of certain regions, thus decreasing competition," Rehak said. "On the other, customers aren't focused as much on price as they have been over the past couple of years. Many of them are interested in working with a financially secure partner and are prepared to pay a little more for greater stability."

This isn't to say that everyone is opening up their checkbooks. "Some enterprises continue to look for opportunities and, in some cases, are trying to buy capacity at wholesale prices instead of retail prices," Rehak said. "This is happening but it's the exception."

If prices are stabilizing in Europe and the U.S., their erosion continues unabated on many routes within Asia and across the Pacific, where new submarine cables have or will soon come online, according to Rehak. "We're noticing huge variations in the Asia markets, with some suppliers charging two times as much as others on the very same routes," she said.

Oct 8, 2002, 09:11 PM	#1
Zardon DriverHeaven Founder Join Date: May 2002 Posts: 32,480 Rep Power: 179	Good and bad news about bandwidth prices First the good news: Bandwidth prices are stabilizing on several key routes in Europe, the U.S., and across the Atlantic -- a trend that could help many battered service providers stay afloat. Now the bad news: Corporate users may have to kiss goodbye bargain rates on some popular routes. After years of rapid declines, bandwidth prices on many major long-haul routes have stabilized and, in some cases, even risen, according to data published Monday by Telegeography Inc., a market research group based in Washington. The price plunge has eased, for instance, on one of the world's busiest international routes, New York to London. And within the U.S. and Europe, prices on several popular routes have actually risen. The median price for a 155M bps (bits per second) monthly circuit lease on the Atlanta to New York route, for example, increased 4.6 percent, according to Telegeography. Alexandra Rehak, director of European operations at Telegeography's London office, sees two factors for the new price development. "On the one hand, some of the companies that had offered very low prices are out of business, while others have pulled out of certain regions, thus decreasing competition," Rehak said. "On the other, customers aren't focused as much on price as they have been over the past couple of years. Many of them are interested in working with a financially secure partner and are prepared to pay a little more for greater stability." This isn't to say that everyone is opening up their checkbooks. "Some enterprises continue to look for opportunities and, in some cases, are trying to buy capacity at wholesale prices instead of retail prices," Rehak said. "This is happening but it's the exception." If prices are stabilizing in Europe and the U.S., their erosion continues unabated on many routes within Asia and across the Pacific, where new submarine cables have or will soon come online, according to Rehak. "We're noticing huge variations in the Asia markets, with some suppliers charging two times as much as others on the very same routes," she said.