Bandwidth Growth Surges as Prices Stabilize

Wholesale international bandwidth providers have experienced unprecedented increases in demand over the past five years, but equally large price declines have eroded much of the benefit of this traffic growth. But the business trend improved significantly in the most recent 12-month period, according to the research firm TeleGeography, as international IP traffic growth accelerated while the pace of price erosion abated noticeably in many of the world's most competitive markets.

The findings are summarized in TeleGeography's latest report, Global Internet Geography 2007. "At the moment, nearly all markets have growth rates that more than compensate for the steady decline in wholesale prices, providing opportunities for carriers to increase return on investment," said Eric Schoonover, Senior Research Analyst with TeleGeography, who said this was particularly true in high growth markets like Latin America and Asia. In Buenos Aires, the average price for IP Transit fell only 11 percent to $187 per Mbps in 2006, while the average Internet traffic from Buenos Aires increased by 119 percent. TeleGeography's web site includes a graphic with additional examples.