Wide disparities in global Ethernet pricing

Staff writer
21 Jun 2013
00:00

Ethernet private lines provide a flexible, cost-effective alternative to legacy SDH/SONET technologies. But new data from TeleGeography's Ethernet Pricing Service show widespread geographic disparities in Ethernet over MPLS (EoMPLS) price levels and structures.

The lowest prices for point-to-point EoMPLS circuits are found on routes between major cities in Europe and the US, and on trans-Atlantic links. In Q1 2013, the median monthly price of a 10 Mbps circuit was $446 between London and Paris, $896 from Los Angeles to New York, and $652 from London to New York. Trans-Pacific and intra-Asian prices are significantly higher.

In Q1 2013, the median price of a 10 Mbps circuit was $1,706 per month between Los Angeles and Tokyo and $1,863 per month between Hong Kong and Tokyo.

Regional differences are also apparent when examining the cost associated with increasing capacity. On major terrestrial routes in Europe and North America, the median price of a 100-Mbps EoMPLS circuit was approximately twice the price of a 10-Mbps circuit, at $948 per month between London and Paris and $1,869 per month between Los Angeles and New York.

Upgrading to 100-Mbps circuits in Asia can be far more costly. The median price of a trans-Pacific 100-Mbps EoMPLS circuit was $6,613 in Q1 2013, about four times the price of a 10-Mbps link, while the median Hong Kong-Tokyo 100-Mbps price was $8,258, or 4.4 times more than a 10-Mbps circuit.

Ethernet prices and the multiples associated with upgrading capacity can vary dramatically by market. Nevertheless, Ethernet provides a cost-effective solution for enterprises looking to purchase higher capacity services. Paying two to five times the price for 10 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.

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