Have Bandwidth Price Declines Slowed?


Looks like the price declines in the bandwidth market might actually be slowing to a crawl. In recent days, I have heard anecdotal evidence that some routes like NY-Boston and NY-San Francisco might be filling up, and as a result the price for bandwidth is not declining as rapidly as it was say couple of years ago. You could find some evidence in the quarterly numbers reported by AT&T and Level 3. Ma Bell noted that ita data revenues (long haul) business declined 10.2% from the prior-year second quarter as a result of pricing pressure and technology migration. That’s not as steep as 30% declines a few years ago. Level 3, reported communications revenue of $342 million in the second quarter. Out of that the transport business was $122 million, down only $3 million from the second quarter sales in that specific business of $119 million. Not concrete evidence, but looks like the eye of the storm might finally have passed over bandwidth providers. The best explanation for this trend could be increased broadband deployment across the country and slight loosening of the purse strings by large corporations. Next couple of quarters I suspect things could remain flat, and then perhaps, IPTV and 3G wireless rollout is going to create new demand for bandwidth. I will keep you posted.

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