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According to Data from TeleGeography‘s Wholesale Bandwidth Pricing Database, there are stark price differences around the globe for companies with large international bandwidth requirements. “For example, the median price of a 2 Mbps E-1 circuit between London and Johannesburg in Q4 2008 was nearly $15,000. For the same price, a bandwidth buyer could lease a 10 Gbps wavelength—500 times the capacity of an E-1—between London and New York.”
Circuit prices vary for a number of reasons, including geography, service provider, circuit capacity and type, according to TeleGeography. “The most expensive routes are to countries that grant few international gateway licenses, or that are dominated by an incumbent service provider.”
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Did you notice on the left it says Johannesburg-London, basically it means South Africa -> rest of world. 10000/2 means that the IP route costs 5000 times the price of London-NY. Pretty ridiculous, but hopefully by September our competitive landscape will start to kick in. New government, new laws, >400 licensed telecoms operators, 3 new undersea cables and another 3 coming in the next 2 years, is all the news. Read more on Steve Songs update on Undersea African Cables
What is even more ridiculous is that Level3 wants more than $20,000 per month for 1 GB (not 10 GB!) of bandwidth between Laramie, Wyoming and Denver, Colorado—along an existing long haul fiber route and at an existing building.
Want to know why the US is behind in broadband deployment? It’s because of price gouging, market concentration, and refusal to deal in the backbone market.