Carriers’ Ethernet investments yield accelerating price declines

5 Jun 2014

Enterprises rely on their data networks to link employees around the globe, and increasingly require a consistent end-user experience at all locations. To meet this demand, carriers are channeling investments towards broadening the geographic availability of their Ethernet portfolios. New data from TeleGeography’s Ethernet Pricing Service reveal that as Ethernet service availability has grown around the world, price declines have accelerated. Between H1 2013 and H1 2014, median monthly lease prices for 100Mbps point-to-point Ethernet over MPLS (EoMPLS) pseudowires declined an average of 44%, compared to 26% annually since H1 2011.

As carriers’ on-net EoMPLS coverage increased 17% in Latin America and 10% in Asia over the past year, price declines picked up speed. Between H1 2013 and H1 2014, the median price of a 100Mbps EoMPLS pseudowire between Buenos Aires and Miami fell 39%, to USD5,321, while the median 100Mbps EoMPLS price between Hong Kong and Tokyo dropped 46%, to USD4,200 per month. By comparison, over the previous three years, 100Mbps prices on these routes decreased at a more moderate annualised rate of 28% and 27%, respectively.

Prices also fell rapidly in the US and Europe, where carriers’ on-net EoMPLS coverage grew 12% and 10%, respectively. The median 100Mbps EoMPLS price between Los Angeles and New York decreased 49% between H1 2013 and H1 2014, to USD943—well above the 20% annualised decline of the previous three years. Similarly, the median monthly 100Mbps pseudowire price between Frankfurt and London fell 29% in the past year, to USD725, compared to an annualised rate of 19% over the previous three years.

‘Both global and regional carriers are expanding their on-net coverage and adjusting their prices as they seek to position themselves in the market,’ said TeleGeography analyst Brianna Boudreau. ‘Buyers can expect to see further price erosion as service availability continues to grow.’

TeleGeography’s Ethernet Pricing Service benchmarks the price of long-haul and international Ethernet services by provider, capacity, service and route.

To speak with an analyst, please call +1-202-741-0047 or email press@telegeography.com.

International,
http://www.telegeography.com/research-services/ethernet-pricing-service/index.html

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