Submarine cabling boom drives down bandwidth prices in high cost regions

The surge of both new submarine cable systems and upgrades of existing systems is having two benefits: more capacity and lower prices, a new TeleGeography report indicates.

Ongoing cable builds have driven down prices particularly in four regions--Africa, the Middle East, South Asia and Latin America--all of which had been known for high bandwidth prices due to a lack of competition.

Although prices are coming down, TeleGeography notes that "vast regional disparities persist in both price levels and rates of decline."

In Asia Pacific, the median price to purchase a 10G wavelength between Los Angeles and Tokyo declined 35 percent between Q1 2011 and Q1 2012, while prices of 10G wavelengths between Hong Kong and Singapore declined 10 percent between Q1 2011 and Q1 2012, to $43,935 per month.

India has also benefited from three new systems that were launched between 2009 and 2011. But even though 10G wavelength prices between London and Mumbai dropped 22 percent year-over-year between Q1 2011 and Q1 2012, they still cost $175,000 a month.

For the U.S. to Latin America route, a number of network upgrades between the regions from 2007 to 2011 has contributed to a rise in lit capacity and lower prices. The monthly cost for a 10G circuit between Miami and Sao Paulo, Brazil declined 29 percent, from $140,000 to $100,000.

Prices will likely fall further in the U.S. to Latin America route as new cable systems such as Seaborn Networks' Seabras-1 submarine cable, which will provide a direct route between the Unites States and Brazil, scheduled to be completed in 2014.

Telegeography 10G lease prices

For more:
- TeleGeography has this post

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