Originally posted by TeleGeography

TeleGeography LogoTotal 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 fiber cross-connect prices are a particularly significant contributor to differences between colocation prices in the U.S. and Europe.

A company seeking to rent a cabinet with a power density of four kilowatts and one fiber cross-connect for two years would pay an average of $1,800 per month in European metro areas surveyed, and $1,700 per month in North American metro areas covered. While the total prices are similar, the cross-connect accounts for 17 percent of the average price in the U.S., compared to just four percent in Europe, where charges for power, space, and cabinet installation account for a larger share of the cost.

Total Monthly Colocation Prices by Metro Area, H1 2014 Colo_Pricing.png

Source: TeleGeography

While the average cost of a cabinet with a single cross-connect is modestly lower in the U.S. 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 U.S. is $2,860, compared to $2,120 in Europe. Cross-connect charges account for 50 percent of the cost of this configuration in the U.S., compared with just 17 percent 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 $2,828 per month, 77 percent 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 $1,747 per month, just 10 percent higher than the price of a cabinet with one cross-connect.

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

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

  • Prices charged by operators for colocation space and power
  • Rental charges per unit of power and space, cross-connect charges, cabinet installation rates, total monthly cost, and historical price trends
  • Semi-annual written summary of findings providing market trend analysis and insight