Companies that use globalvirtual and dedicated private networksare battling to get best value for money in the face of
widely differing prices for the same services, a study has
revealed.
Market analyst
TeleGeography found
that prices for international network service vary dramatically by
service provider, by country, and by class of service. Different
rates of change in pricing also make it harder to optimise
communications budgets, it said.
TeleGeography's latest Enterprise Networks Research Service
found the median price of a 2mbps E-1 IP VPN port in London was
$576 per month in Q1 2008, but a comparable connection cost $1,034
in Hong Kong, $2,871 in Beijing and $6,083 in La Paz, Bolivia.
"The wide range of prices quoted by telecommunications companies
for similar services within a given city suggests that telcos, too,
are having a difficult time finding appropriate prices for their
services," it said. In Beijing, prices for 2mbps VPN ports varied
from $1,300 per month to nearly $5,000 per month.
The rate of price change also varies widely by market. The
median monthly price of a 1.5mbps T-1 port in Atlanta fell 19% from
$580 to $470 between Q2 2007 and Q1 2008. In contrast, the median
E-1 port price in Dubai, one of the most expensive markets tracked
by TeleGeography, fell 4%, from $16,538 to $15,877.
"VPNs lie at the heart of modern corporate networks," said
TeleGeography analyst Gregory Bryan. "However, the tremendous range
and variability of prices reflect that this market is neither
transparent, nor commoditised. Both buyers and sellers of wide area
networking services need to keep close track of market prices to
ensure that the prices they charge - or pay - are appropriate to
the markets in which they operate."
Network services
E-carrier systems permanently allocate capacity for a voice call
for its entire duration. This ensures high call quality because the
transmission arrives with the same short delay (latency) and
capacity at all times.
T-carrier, sometimes abbreviated as T-CXR, is the generic
designator for any of several digitally multiplexed telecoms
carrier systems originally developed by Bell Labs and used in North
America, Japan, and Korea.
The two are incompatible.