IP VPN prices decline 12%, but regional differences remain

Tools

While T-1 and E-1 MPLS IP VPN port prices have fallen 12 percent globally, a new TeleGeography report revealed that prices continue to vary by region and even within regions.

Median T-1 VPN prices in established markets such as the United States and Europe were the lowest.

In major U.S. cities such as Los Angeles and Atlanta, enterprises could pay $234 and $251, respectively, for a T-1 VPN port.

Meanwhile, in Western Europe, the price of an E-1 VPN port ranges from $313 in London to $340 in Amsterdam. However, in Eastern Europe and the Balkans, the price of the same service could be six times higher.

By contrast, VPN prices in the Middle East and Africa remain steep.

In contrast to Jerusalem where E-1 ports cost $648 a month, the same service costs $6,532 in Manama, Bahrain and $18,650 in Beirut. Finally, in Africa the median price of an E-1 VPN port ranges from $3,128 per month in Cairo to $26,613 in Douala, Cameroon.

"Enterprise services remain expensive, and price differences vast, in markets with low levels of connectivity and competition," said TeleGeography analyst Brianna Boudreau. "However, as transport costs to emerging markets such as the Middle East and Africa fall, it will enable carriers to expand their IP VPN networks more cost-effectively, translating to lower, more consistent regional pricing in the coming years."

Geographic differences in service pricing are not just relegated to IP VPNs.

Similar trends exist with the prices of Ethernet Virtual Private LAN Service (VPLS) services and 10G wavelengths. While VPLS prices declined as much as 39 percent in established regions such as the United States, prices in Asian cities continues to be high, for example.

For more:
- see this post

Special Series: Charting the Ethernet ecosystem

Related articles:
10G wavelength prices continue to drop, says TeleGeography
International telephony up 5%, but long-distance providers face threats from OTT
VPLS prices decline as much as 39% in established regions