Who Still Sells IRUs?

The answer: most carriers are still trying, but not many succeed. Based on TeleGeography's latest research for its Bandwidth Pricing Service, almost all of the 44 carriers surveyed offered proposals for IRUs in the last year, and about half actually completed IRU transactions. However, the total number of deals was small -- most carriers only sold a few IRUs in 2004.

This could change in coming months, however, especially on undersea routes through Asia. As annual lease prices approach closer and closer to cost, some bandwidth buyers may begin to believe that bottom of the market has been reached. For those with an optimistic view of price stabilization, locking in today's price on a multiyear discount deal may be an attractive option.

The market for IRUs in other regions appears bleak. In particular, North American carriers surveyed by TeleGeography have little faith that IRUs will be attractive for years to come. Lease prices continue to fall too fast to make IRUs a logical way to expand network capacity.

Learn more about TeleGeography's Bandwidth Pricing research by clicking here.

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