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Outlook for IP Transit Prices in 2018

Pricing Network

By Brianna BoudreauSep 5, 2018

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IP transit prices continued to decline steadily in 2018.

Weighted median 10 GigE prices across a global sample of transit markets—London, New York, São Paulo, and Singapore—decreased an average of 27 percent compounded annually between 2015 and 2018.

In the primary internet hubs of London and New York, 10 GigE prices declined a bit less than the average at 15 and 21 percent compounded annually from 2015 to 2018, respectively.

The higher growth, more expensive 10 GigE markets of São Paulo and Singapore dropped 45 and 30 percent, respectively, compounded annually from 2015 to 2018.

Weighted Median 10 Gbps IP Transit & Wavelength Prices on Major International Routes, Q2 2018

Weighted Median 10 Gbps IP Transit & Wavelength Prices on Major International Routes, Q2 2018

Weighted Median 10 Gbps IP Transit Q2 2018

Varying rates of price erosion have led to some price convergence between more and less mature transit markets.

The weighted median 10 GigE price in Singapore is now just twice the price of London, compared to four times the price in 2015. Similarly, São Paulo’s 10 GigE price is now 4 times the price of New York, compared to 13 times in 2015.

Outside of these markets, substantial price differences persist. In Q2 2018, the 10 GigE IP transit in Sydney was 13 times the price in Los Angeles, largely due to the underlying cost of transport across the Pacific to access global internet hubs.

In Q2 2018, the 10 GigE IP transit in Sydney was 13 times the price in Los Angeles, largely due to the underlying cost of transport across the Pacific to access global internet hubs.

In remote locations with limited bandwidth utilization and competition, such as sub-Saharan Africa and remote island nations, unit prices extend far higher than global hubs.

This content comes from TeleGeography's Global Internet Geography Research Service. This tool provides analysis and statistics on internet capacity and traffic, IP transit pricing, and backbone operators. 

 

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Brianna Boudreau

Brianna Boudreau

Brianna is a Senior Analyst at TeleGeography. Brianna is part of our pricing team and specializes in pricing analysis for international private line, IP Transit, and Enterprise products.

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