Stability in the Atlantic Capacity Market?

According to TeleGeography's latest Bandwidth Pricing Report, a consortium of major American and European carriers have begun shopping for as much as a terabit of capacity across the Atlantic. Such a huge capacity purchase would have two key outcomes:

First, if the purchase goes through, the consortium would be picking up nearly a third of current lit capacity on the route.

Second, because the consortium is looking at a long term purchase, it may indicate that the biggest carriers think that capacity prices are near their long term floor, ending a decade-long plunge in pricing.

Because of the size of the consortium's purchase, the price stabilization theory may turn out to be self-fulfilling. With a great deal of available bandwidth supply taken up, cable operators will be forced, somewhat ahead of schedule, to upgrade their systems. The costs incurred will give them little choice but to hold, or perhaps even raise, prices up for other customers to recoup the upgrade expense.

To learn more about bandwidth pricing trends and market develoments, see TeleGeography's Bandwidth Pricing Database Service. The Pricing Service offers current capacity pricing on over 100 routes, a monthly email, and on-demand research. To learn more about this service, please visit our website:

http://www.telegeography.com/products/bandwidth_pricing

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