Ethernet pricing varies widely between countries, study says

Ethernet over MPLS (EoMPLS) may have surpassed legacy Frame Relay and ATM as a more flexible networking technology, but according to TeleGeography's Ethernet Pricing Service, pricing between countries remains inconsistent.

As seen with other services such as IP/VPNs and 10G wavelengths, the lowest prices for EoMPLS services reside between major cities in both Europe and the United States and on trans-Atlantic connections. The median monthly price for a 10 Mbps circuit was $446 between London and Paris, while the route between Los Angeles to New York and from London to New York cost $896 and $652, respectively.

TeleGeography pricing models

However, routes between the United States and Asia Pacific locations such as Hong Kong and Tokyo are far more expensive. A carrier or business customer that purchases a 10 Mbps circuit between Los Angeles and Tokyo would have to pay $1,706, while the Hong Kong and Tokyo route costs $1,863 a month.

Similar pricing differences were also seen on the capacity side. While the median price of a 100 Mbps EoMPLS circuit is $948--almost twice the price of a 10 Mbps circuit in both Europe and North America--the median price of a trans-Pacific 100 Mbps EoMPLS circuit was $6,613 in Q1 2013.

Brianna Boudreau, a TeleGeography analyst, said that while Ethernet prices and capacity upgrades can "vary dramatically by market" it provides a cost-effective solution for enterprises looking to purchase higher capacity services."

Boudreau added that "Paying two to five times the price for ten times the Ethernet capacity equates to significantly less than paying the long-standing SDH/SONET multiple of 2.5 times the price for just four times the capacity."

For more:
- see TeleGeography's report

Related articles:
IP VPN prices decline 12%, but regional differences remain
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

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