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Great time to shift bytes: International bandwidth prices are in free fall

Prices on cables plummeting over the past three years, according to number crunchers

International bandwidth prices are plummeting, with some routes offering 10 Gbps connections for less than US$5,000 per month.

That's the cost of a link between New York and London, according to international telco analyst firm Telegeography (best known for its submarine cable maps). That route, however, has always been one of the most contested in the world: in 2014, Telegeography's Brianna Boudreau noted on Tuesday, 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 10Gbps link 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 prices help contain internet service providers' costs, and even if broadband plan prices don't change, it helps to expand user download allowances – in theory, anyway.

Content delivery networks are another beneficiary, since their job of getting content closer to consumers makes them heavy international bandwidth consumers.

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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