Wholesale Internet Bandwidth Prices Keep Falling

Sure it’s not like back in the early 2000s, when those crooks from Enron were driving the prices of bandwidth down into the ground, but even today prices on Internet bandwidth continue to fall. If you are a consumer, however, there’s a good chance you’re wondering what I’m talking about — after all, broadband service providers like Comcast and Time Warner are talking about putting the meter on the bandwidth they serve up to residential subscribers.

What I’m talking about is wholesale Internet bandwidth that is sold to Internet services providers (ISPs) and content companies like Yahoo and Google. This is called IP Transit and it is sold at a rate of “per megabit per second per month” and often requires a monthly bandwidth commitment. Cogent Communications, Level 3 Communications, Tata Communications, Global Crossing and AT&T are some of the more well-known IP Transit providers.

Today research firm Telegeography came out with a report that shows the price of wholesale Internet access (IP transit), while varied around the globe, are still in decline. Here are some facts.

  • GigE port prices in major U.S. cities fell 30-40 percent between Q2 2007 and Q2 2008. Median monthly IP transit prices for 1,000 Mbps Gigabit Ethernet (GigE) ports in major U.S. and European cities ranged from $10-$14 per Mbps in Q2 2008.
  • GigE port prices in Latin American cities declined a more modest 15-20 percent for the same period. Median GigE port prices range from $73 per month in Buenos Aires to $86 per month in Santiago.
  • Prices for GigE ports in major Asian cities in Q2 2008 ranged from $30 per Mbps month in Seoul to $45 per Mbps per month in Tokyo, higher than the U.S. or Europe. The price declines were around 30 percent.

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