By Michael Grotticelli /
08.08.2012
Originally featured on BroadcastEngineering.com
IP transmission prices falling fast
The falling prices could be important to broadcast stations and groups considering centralcasting strategies.

There looks to be some good news for broadcasters and content distributors, regarding their operational budgets for delivering file-based programming. Prices for wholesale IP transmission service continue to go down throughout the world, while accelerated declines in costs were particularly significant  between the second quarters of 2011 and 2012.

The falling prices could be important to broadcast stations and groups considering centralcasting strategies or connecting with third-party software service providers for high-bandwidth feeds.

According to new data from TeleGeography’s IP Transit Pricing Service, the median monthly lease price for a full GigE port in London dropped 57 percent between Q2 2011 and Q2 2012 to $3.13 per Mb/s, compared with a 31 percent decline compounded annually from Q2 2007 to Q2 2012.

In New York, the comparable price dropped 50 percent to $3.50 per Mb/s over the past year, and 26 percent compounded annually over the five-year period. Pricing for short-term promotions and high capacities has dropped below $1.00 per Mb/s per month.

While prices have declined globally, there are significant geographic disparities. For example, despite falling 22 percent compounded annually between Q2 2007 and Q2 2012, the median price of a GigE port in Hong Kong has remained 2.7 to 5.1 times the price of a GigE port in London over the past five years.

The price of a GigE port in São Paulo also fell 22 percent compounded annually between Q2 2007 and Q2 2012, but has remained between 5.2 and 8.2 times the price of a comparable port in New York.

“IP transit prices have reached extremely low levels in developed markets, but remain high in many developing markets and in countries that are remote from major IP transit hubs,” said Erik Kreifeldt, an analyst at TeleGeography.

“Nevertheless, few places remain where transit prices exceed $100 per Mb/s. As carriers expand into emerging markets and establish new price floors in developed markets, global IP transit prices will continue to fall.”

In a GigaOM report about the falling wholesale prices, the publication said it doesn’t mean consumer prices will fall, since there is little competition in the middle and last mile access business. However, it is now cheaper to stream bits from Netflix, Google and other Web traffic across the ocean and major land masses, GigaOM reported.

No reason was provided by TeleGeography for the falling prices, but that increased new investment and new transit routes coming online in the past year are helping drive prices down across undersea and overland cables.

TeleGeography’s service is a comprehensive database of wholesale Internet access price quotes by port capacity and committed data rate from nearly 50 carriers in 70 cities around the world.



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