A global shift to use of Ethernet local access, with a shift of investment towards Ethernet facilities, eventually will mean that absolute prices for legacy access, which today favor T1 or E1 access, compared to 10 Mbps Ethernet connections, will reverse, with Ethernet becoming the more-affordable option.

IP transit prices, for example, keep dropping on a price per megabit basis. Nor is it likely legacy time division multiplex networks are getting the same level of investment as Ethernet and IP networks.

How many service providers are investing as heavily as they once did in legacy networks?

Of course, local access circuits often are purchased on an absolute recurring cost basis, not a “per megabit” basis. So a particular customer might face the choice between a T1 1.5 Mbps connection at $450 a month, or a 10 Mbps connection at $950 a month.

Granted, there often are reasons other than recurring cost that make Ethernet access a better choice. But Ethernet access tends to remain more expensive for business customers than legacy T1 or E1 alternatives, at the moment.

On the other hand, at least some providers are selling 2 Mbps Ethernet cheaper than T1, already.

Just how long it might take for 10 Mbps connections to cost less than T1 or E1 is not so clear. But given the order of magnitude increases in consumer bandwidth about every five years, it seems only a matter of time before business access pricing favors Ethernet on a recurring cost basis.

Some of the lowest access prices can be found in major cities in the U.S., Japan, India and the United Kingdom.

Average monthly prices ranged from $300 for a T-1 in New York to $398 for an E-1 in London.

The average price of an E-1 circuit in Hong Kong was only slightly higher, at $469 per month. Johannesburg and Sydney came in near the middle of the pack, at $655 and $665 per month, respectively.

But the $836 per month price of an E-1 in Shanghai was more than twice the price of a comparable circuit in Delhi and London, and nearly three times higher than in New York and Tokyo, TeleGeography (News - Alert) says.

At $964 per month, E-1 circuits in Moscow were far more expensive than in the more developed and competitive markets of Western Europe. Sao Paulo was especially expensive, with an average E-1 monthly lease price of $1,566.


Edited by Alisen Downey