International bandwidth prices are in free-fall

Prices on submarine cables down by 30 per cent in three years

International bandwidth prices are in free-fall, with some routes offering 10 Gbps wavelengths for less than US$5,000 per month.

That’s the price of a wavelength between New York and London, according to international telco analyst firm Telegeography.

That route, however, has always been one of the most contested in the world: in 2014, Telegeography’s Brianna Boudreau noted, the price was already well under $10,000.

By comparison, the New York to Tokyo route, costing roughly $15,000 per month (median price) for a 10 Gbps wavelength in 2014, has fallen to around a third of that today.

“Median monthly lease prices across a selection of critical routes declined an average of 26 per cent from 2016 to 2017,” the post notes, “and 30 per cent compounded annually from 2014 to 2017.”

It’s good news for carriers, but also for users, since those international circuits carry all-important Internet transit, much or most of it destined one way or another for content sourced from America. Lower cable price help contain internet service providers’ costs, and even if broadband plan prices don’t change, it helps to expand user download allowances.

South American carriers have benefited most from the price falls, with the Miami to São Paulo link plummeting from $50,000 per month for 10 Gbps links to around $10,000, a “price erosion at 41 per cent compounded annually”, the post noted.

Telegeography also noted that carriers are moving from 10 Gbps towards 100 Gbps as the basis of their wholesale purchases: “As price multiples fall, the share of 100 Gbps circuit sales continues to increase and the service now comprises a substantial portion of sales in a number of markets.”

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