We’ve witnessed an unprecedented slowing of bandwidth price erosion globally over the past few years, as network investors, carriers, and customers grappled with delays in new network projects, existing system upgrades, and rising equipment costs.
For the first time, many customers found themselves asking if prices were actually increasing and when price declines would return to typical levels.
While the supply chain constraints and card shortages that spurred this trend have resolved themselves, geopolitical issues have not. As a result, recent price trends vary dramatically by region.
According to new data from TeleGeography’s Transport Networks Research Service, price erosion has started to accelerate on some routes, but remains stalled on others.
The figure below highlights the compound annual price decline for 100 Gbps wavelengths from 2020 to 2023 (the dark blue bars) versus the prior three years, 2017-2020 (turquoise bars).
Weighted Median Monthly 100 Gbps Wavelength Price Erosion
Notes: Each bar represents the percentage decline of the weighted median price, calculated as a three-year compound annual growth rate for the listed route and time period. Source: © 2024 TeleGeography
Across all the routes featured above, 100 Gbps wavelength prices decreased an average of 13% between 2020 and 2023. That’s compared to 18% over the prior three years (2017-2020).
On routes with more ample supply, price erosion has returned to form as new high capacity cables enter service.
On routes with more ample supply, price erosion has returned to form as new high capacity cables enter service.
For example, the U.S.-Latin America route continues to fall at a brisk pace, still feeling the effects of new cables, diverse fiber pair ownership, and upgrades to existing systems. The route is also anticipating the launch of the Firmina cable later this year.
Between 2020 and 2023, 100 Gbps wavelength prices on Miami-São Paulo decreased 28% compounded annually. That has exceeded the 22% decrease between 2017 and 2020.
While not featured here, Johannesburg-London, which saw a massive influx of new capacity from the launch of Equiano last year, recorded an annual 22% price drop for 100 Gbps wavelengths over the past three years.
On routes with continued delays in new supply, price erosion is still stalled.
On routes with continued delays in new supply, price erosion is still stalled.
For example, 100 Gbps prices on Marseille-Singapore and Hong Kong-Singapore decreased just 2% and 6% annually from 2020-2023. That’s compared to 28% and 16% annually from 2017-2020.
The Europe-Asia and intra-Asia routes have been especially impacted by recent delays in supply. While card shortages have resolved themselves, geopolitical issues play a key role in delays of new systems on both routes.
Until new systems start coming into service this year, available inventory is going for 2023 prices or potentially higher.
Download the new Transport Networks Executive Summary to keep reading our latest analysis.
Brianna Boudreau
Senior Research Manager Brianna Boudreau joined TeleGeography in 2008. She specializes in pricing and market analysis for wholesale and enterprise network services with a regional focus on Asia and Oceania. While at TeleGeography, Brianna has helped develop and launch several new lines of research, including our Cloud and WAN Research Service.