September 09, 2015
IP transit service prices continue to decline throughout the world. According to new data from TeleGeography’s IP Transit Pricing Service, median 10 gigabit per second Ethernet (10 GigE) port prices across key global transit markets decreased an average of 14 percent compounded annually between 2012 and 2015, and 22 percent in the past year. Despite widespread declines, significant price disparities persist between primary Internet traffic hubs and more remote markets.
The median 10 GigE port price in London, which serves as a critical international traffic hub for Europe, Africa, and parts of Asia, fell 16 percent compounded annually over the past four years to reach $1.00 per Mbps per month in Q2 2015 and is among the lowest in the world. Similarly, median prices in both Los Angeles and Miami, which serve as traffic hubs for Asia and Latin America respectively, fell 14 percent per year to $1.20 per Mbps per month.
Prices have fallen much slower and transit is more expensive in regions that remain largely dependent on long-haul links to Europe or the U.S. to gain access to international connectivity. Here, service providers incur the cost of transport and price local transit accordingly, yielding much higher prices than in hub markets.
For example, in São Paulo, where most Internet traffic is ultimately exchanged remotely in Miami, the median 10 GigE port price fell only five percent compounded annually between 2012 and 2015 to $16 per Mbps per month. Service in Sydney, for which a significant amount of Internet traffic is exchanged in Los Angeles, also remains costly, at $18 per Mbps per month for a 10 GigE port in Q2 2015.
While IP transit prices have reached extremely low levels in principal markets, they scale considerably higher outside of these core hubs. Transport costs remain a primary factor in this price disparity. As carriers expand IP networks and distributors push content closer to end-users, ISPs in remote markets will become less exposed to those costs.
TeleGeography’s IP Transit Pricing Service is a comprehensive database of wholesale Internet access price quotes by port capacity and committed data rate for over 100 cities around the world. It includes:
- Prices for nearly 20 port capacity configurations from 10 Mbps to 40 Gbps, including full and partial port committed data rates
- More than 390,000 price quotes from over 60 carriers
- Nearly 10,000 new price quotes each quarter